Bond 36,000

The bond boom continues. The yield on the 10-year T-bond briefly dropped below 2.5% this morning:

Nortfolk Southern just sold $250 million in 100-year bonds.

The interest rate on Norfolk Southern’s new debt is 6% for a yield of 5.95%, about 0.90 percentage points more than where the company’s outstanding 30 year debt was trading Monday. It was the lowest yield for 100-year debt bankers could recall, breaking through the 6% yield on the company’s 100-year issue in 2005.

What’s the point of even having a stock market if investors only want debt? Just float debt and buy back all your stock.

Posted by Eddy Elfenbein on August 24th, 2010 at 11:21 am

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