FedEx Corp. (FDX:US) plans to raise $1 billion in a two-part offering, including its first 30-year bond in more than two decades.
The world’s largest cargo airline will sell 10-year notes and obligations due in 2042 to fund working capital and general corporate purposes, the Memphis, Tennessee-based company said today in a regulatory filing. FedEx last sold 30-year bonds in 1989, when it issued $100 million of 9.625 percent debt that was called in 2000, according to data compiled by Bloomberg.
Borrowing costs for FedEx at 2.13 percent are less than the 3.37 percent average among peers, according to the Bank of America Merrill Lynch U.S. corporate transportation index. The company plans to boost air cargo profit margins to at least 10 percent, partly by replacing junkyard-ready jets with more efficient models. The gauge (FDX:US) was 4.8 percent in fiscal 2012.
Goldman Sachs Group Inc., JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp. and Mizuho Financial Group Inc. (8411) are managing the sale, according to the filing.
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