Thursday, May 21, 2009

Notable financing

Hewlett-Packard raises some cheap capital.
"NEW YORK, May 21 (Reuters) - Hewlett-Packard on Thursday (HPQ.N) launched a $2 billion three-part note sale, said IFR, a Thomson Reuters service.

The offering includes $750 million in two-year floating-rate notes and is expected to have a coupon rate of 105 basis points over the three-month London Interbank Offered Rate.

It also includes $1 billion in two-year fixed-rate notes expected to yield 140 basis points over comparable U.S. Treasuries and $250 million in three-year fixed-rate notes expected to yield 160 basis points over Treasuries."

AlphaNinja - 140 to 160 basis points above the comparable treasuries. Cost of capital is UNDER 5%. The company's FCFY (Free Cash flow yield as a % of net Market Value) is 10%. Simple math makes this stock a buy, but I've got to wait for a pullback.

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