Wal-Mart Bonds Fly Off Shelf

Three-year tranche of the $5 bln offering came at the narrowest spread seen this year, beating out PepsiCo and Praxair debt.

Wal-Mart Stores Inc. is winning the lowest borrowing costs this year as its AA credit rating offsets challenges ranging from a corruption probe to reports of thinly stocked shelves.

The world’s largest retailer, which has $5 billion of debt maturing through October, yesterday sold an equal amount of bonds in a four-part offering that included the lowest coupon on three-year notes in 2013, according to data compiled by Bloomberg. Wal-Mart’s sale adds to a supply of AA-rated debt that has declined to 11 percent of the $4 trillion U.S. corporate market from 18 percent three years ago.

Interest Cost

The company’s weighted average coupon of 2.09 percent on yesterday’s transaction is about half the 4.02 percent paid on its $3.69 billion of dollar-denominated debt maturing this year, Bloomberg data show.

‘Execute Superbly’

Wal-Mart’s in-stock shelf availability is at historically high levels and averages between 90 percent and 95 percent, Hargrove said.

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