Capital Markets

Target’s Aim: $4 Billion in Debt

Discount retailer Target, John Deer Capital Corp, the Asian Development Bank, Xcel Energy, and Harrah's Entertainment turn to the debt markets with...
Stephen TaubJanuary 14, 2008

Led by discount retailer Target, which issued $4 billion in debt Monday, a number of well-known companies have tapped the capital markets in the past few days.

Target, whose stock is trading slightly above its 52-week low, is offering $500 million in five-year notes, $1.25 billion in 10-year notes and $2.25 billion in 30-year bonds, according to Reuters. The joint lead managers are Banc of America Securities, Citigroup Global Markets and Lehman Brothers, according to the wire service.

Likewise, John Deere Capital Corp, a unit of Deere & Co., sold $350 million in three-year, floating-rate, medium-term notes on Monday, according to Reuters. It had originally planned to raise $300 million. Banc of America Securities and Deutsche Bank Securities were the joint book-running managers, according to Reuters.

Meanwhile, Asian Development Bank sold $1 billion in three-year global notes, according to the wire service. It is rated Aaa by Moody’s and AAA by Standard & Poor’s. Daiwa Securities, Morgan Stanley, and RBC Capital Markets were the joint book-running managers, according to the report. Headquartered in Manila, ADB is owned and financed by its 67 member countries, of which 48 are from the region and 19 are from other parts of the globe.

Last Friday, Xcel Energy sold $400 million in 60-year junior subordinated bonds. Reuters said the size of the deal was increased from an originally planned $250 million. The issue is not callable for the first five years. Citigroup Global Markets, JP Morgan and Morgan Stanley were the joint book-running managers for the sale.

On Tuesday, Harrah’s Entertainment plans to begin seeking buyers for a $7.25 billion term loan to help finance its buyout by Apollo Global Management and Texas Pacific Group, which agreed to buy the casino operator in December 2006 for $27.8 billion, including $10.7 billion of assumed debt. Reuters said the loan is expected to be split into three smaller tranches and priced at 300 basis points over the London interbank offered rate (Libor). Road-shows for the deal are scheduled around the country beginning January 16.