Home Depot Raises $2 Billion in Bonds to Fund Share Repurchases

Home Depot Inc., the largest U.S. home-improvement retailer, sold $2 billion of bonds in a two-part offering to help fund share repurchases.

The company, which boosted its dividend and announced a $17 billion stock buyback on Feb. 26, issued $1 billion of 2.7 percent securities due 2023 that yield 85 basis points more than similar-maturity Treasuries and an equal amount of 4.2 percent, 30-year debt with a spread of 110 basis points, according to data compiled by Bloomberg. Proceeds will be used for general corporate purposes including share repurchases, Atlanta-based Home Depot said today in a regulatory filing.

Home Depot’s $1 billion of 5.95 percent bonds due 2041 traded March 26 at 127 cents on the dollar to yield 4.29 percent, or 112 basis points more than Treasuries, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

Shares of Home Depot have gained 14.7 percent this year and cost 23 times earnings, Bloomberg data show. That compares with a 10 percent increase in the Standard & Poor’s 500 index, which has a price-to-earnings ratio of 15.5.

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