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HP selling at least $14B in debt, redeeming up to $8.85B

Sep. 30, 2015 4:41 PM ETHP Inc. (HPQ) StockBy: Eric Jhonsa, SA News Editor3 Comments
  • HP (NYSE:HPQ) is selling at least $14B worth of debt through its HP Enterprise unit, which will become a standalone/publicly-traded company (along with the HP Inc. PC/printing unit) on Nov. 1.
  • In a sign Enterprise will have a weaker credit profile than HP Inc., Bloomberg states the debt is being offered at a premium to HP's existing bonds, A source indicates the offering could feature 10 parts, including 30-year bonds yielding as much as 3.6% more than comparable Treasurys, or 0.51% more than what similar HP debt yields today.
  • The proceeds will be used by the parent company to redeem up to $8.85B in debt and refinance other obligations. HP ended its July quarter with $17.4B in cash/investments, $14.5B in long-term debt, and $11B in notes payable and short-term borrowings. The company previously forecast HP Inc. will have $2.3B in net debt following the breakup.
  • HP rose 3.9% in regular trading. The Nasdaq rose 2.3%.

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