Constellation Advance
Constellation Brands, rated one level below investment- grade by both Moody’s and S&P, raised $1.55 billion last month to help fund the purchase of a remaining 50 percent stake in Crown Imports LLC. The company sold eight- and 10-year notes with a weighted average coupon of 4.1 percent, about 3 percentage points lower the average of its bonds a quarter earlier, Bloomberg data show.
The shares jumped 48 percent this year. Net debt for Constellation will more than double as the Victor, New York- based company wins full control of Corona beer in the U.S., according to analysts at HSBC Holdings Plc.
Tenet Healthcare is taking advantage of lower borrowing costs by using its May 15 sale of $1.05 billion in 4.375 percent secured notes due October 2021 to redeem its $925 million of 8.875 percent securities maturing 2019. Tenet’s $5.43 billion of total debt on March 31 accounted for more than 60 percent of assets, the highest level since at least 1989.
About 81 percent of stocks on the New York Stock Exchange are trading above their 200-day moving average, compared with a mean of 55 percent since 2005, according to Bloomberg data.
“One of the most baffling things to a lot of people about the market is they can’t understand why it’s up so much,” James Paulsen, the Minneapolis-based chief investment strategist at Wells Capital Management, which oversees $325 billion, said in a May 16 phone interview. “We priced a market for the end of the world that’s never occurred,” he said. “People are starting to capitulate on the end-of-the-world idea.”