On Wednesday, the S&P 500 and Toronto were each down 0.2%.
The biggest decliner on our list was Bombardier down 4.5%.
Bombardier has issued new bonds paying 8.75%. According to news reports “The company said it intends to use the net proceeds and cash on hand to redeem its outstanding 7.50 percent senior notes due March 2018 and 5.50 percent senior notes due September 2018.”
Borrowing at 8.75% to pay off debt that costs 7.5% and 5.5%… The brilliance of this is lost on me.
I have not seen any information on how retail investors can buy these bonds. These bonds are some six “notches” below investment grade and so it may be that the discount brokers were not willing to sell these to clients. Possibly, the bonds will go to institutional investors.
Statistics Canada reported a modest improvement in manufacturing sales in September. The low Canadian dollar should keep that story going.