By Mike Cherney
Procter & Gamble Co. (PG) led a brace of investment-grade
companies tapping the corporate-bond market Thursday, with firms
seeking to borrow more than $2 billion in what is shaping up to be
a busy week.
Besides Procter & Gamble, which seeks to sell a $1 billion
18-month floating-rate note, gas-pipeline firm Williams Partners LP
(WPZ) announced plans to sell $750 million in 10-year bonds, while
Hospitality Properties Trust (HPT) and truck-financing firm Paccar
Financial Corp. said they would each seek to borrow $300 million
for 10 and three years, respectively.
The deals come after more than $6 billion in corporate debt
priced Wednesday, said Scott MacDonald, head of research at MC
Asset Management Holdings. He estimated the total on the week at
roughly $20 billion and said "we've been active this month so far"
given that all of August usually averages about $50 billion in new
issuance.
Uncertainty over the presidential election this fall and low
rates likely are leading companies to borrow now. Investors appear
happy to accommodate them, Mr. MacDonald said.
"The corporate-bond market is a relative safe harbor compared to
a lot of other sectors," he said. "For institutional investors, I
think it still remains more attractive. And it certainly beats
keeping your money in a money market."
Williams Partners will use the proceeds of its deal to repay
about $400 million under a credit facility that was used for
capital expenditures, working capital and other expenses, according
to a prospectus. Any excess will be used for general partnership
purposes.
Proctor & Gamble also said it will use its proceeds for
general corporate purposes.
Hospitality Properties said it would prepay $287 million in
notes that come due in February 2013 as well as use proceeds for
general business purposes, such as hotel renovations, rebranding
costs and potential future acquisitions.
Write to Mike Cherney at mike.cherney@dowjones.com
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