Low interest rates are compelling a few money management firms to look at selling corporate bonds.
Denver-based Janus announced it entered into separate privately negotiated exchange agreements in which approximately $117 million of newly issued senior notes due 2018 will be exchanged for $110 million of the firm's existing senior notes due 2014. The deal will help reduce Janus' annual interest expense, extend its present debt maturities and boost its financial flexibility, according to a news release from the company. The financial flexibility will enable the firm to pay off its long-term debt obligations.
Eaton Vance, Boston, announced it priced a public offering of $325 million of senior notes due June 15, 2023. Through this offering, the company expects to receive net proceeds of approximately $323 million, according to a news release issued by Eaton Vance.
If the debt is sold, the net proceeds from the public offering will be used to fund Eaton Vance's tender offer for up to $250 million of its outstanding senior notes due 2017. Remaining proceeds will be used for general corporate purposes.
Net proceeds from Atlanta-based Invesco's offering would be used to redeem $197.1 million of notes due Dec. 15, 2014, that will be called, with the balance to be used to repay the majority of the $754.5 million that was outstanding on its $1.25 billion revolving credit facility as of September 30.
Although a spokesman from Invesco declined to comment, a news release issued by Moody's Investors Service revealed the firm's offering is part of its debt refinancing plan. Neal Epstein, a New York-based senior credit officer at Moody's, said in the statement that Invesco was “taking advantage of its good liquidity position and favorable rate opportunities to reduce its debt servicing burden.”
Money managers are not typically known for selling corporate debt with much frequency, but “everyone's refinancing in the last year or so because the rates are so low,” one money manager said.