FedEx Corp., Memphis, Tenn., has offered $1.2 billion in new bonds, $1 billion of which will be used to make pension fund contributions, spokesman Jess Bunn said in an e-mail.
The issuance consists of $450 million in 10-year debt and $750 million in 30-year debt at an annualized 3.3% and 4.4%, respectively, the company said in SEC filings Tuesday. In an earlier 10-Q filing in December, the company had said it planned to contribute $1 billion in January to its U.S. pension funds using proceeds from a debt offering.
FedEx plans to contribute a total of $2 billion, $443 million of which is required, to its U.S. pension funds in fiscal year 2017, which began June 1.
As of May 31, U.S. pension fund assets totaled $23.01 billion, and projected benefit obligations totaled $27.54 billion, for a funding ratio of 83.6%, according to FedEx's most recent 10-K filing. Also according to the 10-K filing, FedEx made $726 million in pension contributions in the fiscal year ended May 31.
As of May 31, the plans' asset allocation was 29% corporate fixed-income securities, 22% government fixed-income securities, 15% international equities, 14% domestic large-cap equities, 12% global equities, 4% domestic smidcap equities, 2% mortgage-backed and other fixed-income securities, 1% alternative investments, and 1% cash and cash equivalents and other.
Assets totaled $23.83 billion as of Sept. 30, according to Pensions & Investments' data.
