Financial Accounting Blog

Tuesday, December 16, 2003

CNN Money reports that companies are scrambling to issue corporate bonds in expectation of higher interst rates. Intersting to note that all companies are taking on debt, but that it's very uncommon to do so so late in in the year. What are they doing with it all?
Because so much of the corporate issuance is going toward rolling over debt and shoring up balance sheets, little of the money raised will be earmarked for new projects, points out Miller Tabak bond strategist Tony Crescenzi. But that doesn't mean that the issuance doesn't mean companies don't see higher rates on the horizon. "It's a sign that the treasurers of these companies see this as a great opportunity to refinance," he said. "They recognize that rates may not get better."