Nike sells $1 billion in bonds

Nike sells $1 billion in bonds

April 23–Nike on Tuesday sold $1 billion in bonds, the first time in a decade it had entered the bond market.

The sale follows by less than a week Nike’s announcement that it would construct two new office buildings at its World Headquarters campus near Beaverton.

In a U.S. Securities and Exchange Commission filing, the company said proceeds would be used “for general corporate purposes” such as working capital, capital expenditures, share repurchases, as-yet-unplanned acquisitions of assets or businesses, investments in subsidiaries and refinancing debt.

Nike announced last September that it would repurchase $8 billion of its Class B Common Stock over four years. The program started in December, at the completion of the company’s previous $5 billion share repurchase program.

As of Feb. 28, at the end of its fiscal third quarter, the company had about $2.56 billion in cash and equivalents.

The company sold $500 million in 10-year debt at a yield of 2.269 percent, maturing May 1, 2023. And another $500 million in 30-year debt with a 3.641 percent yield, maturing May 1, 2043.

The low cost of borrowing played a part in Nike going to the bond market at this time, spokeswoman Mary Remuzzi said.

“Given the historically low interest rate environment that prevails today, we view the prudent use of debt as a cost effective and efficient tool in our long-term capital deployment strategy,” she said in a statement.

— Allan Brettman