- International Paper (NYSE:IP) borrowed $2.3B through the bond markets yesterday to help pay down its pension obligation, joining General Motors, which took similar steps in February.
- IP says it will use the proceeds to help pay for its proposed acquisition of Weyerhaeuser's pulp business, and use $500M to fund contributions to its pension plan; the company had a $4.2B pension benefit obligation at the end of June.
- Falling interest rates have caused pension obligations to rise this year; the combined pension deficit for S&P 1500 companies ballooned to $568B through the end of Q2, a $164B increase from year-end 2015.