Top Business News
Dow Chemical Offers $6 Billion in Public Debt
Jeanine Poggi
05/08/09 - 11:33 AM EDT
Dow Chemical(DOW Quote) said on Friday that it plans to retire preferred shares used for its recent buyout of Rohm & Haas, which will save the company millions in dividend payments.
The company will offer about $6 billion in debt securities, some of which will be swapped with preferred stock held by two parties that helped push through the $16.5 billion buyout of Rohm last month.
This is a significant move by Dow as the preferred shares pay an unusually high dividend of about 15%, and paying them off as quickly as possible should save the company cash.
Dow plans to use profits from the offering to pay down part of a $9.2 billion loan used to buy Rohm.
The move comes upon the heels of the company offering $1.63 billion in common stock earlier in the week. The offering will increase the company's outstanding shares by about 11%, or 99.5 million shares, sharply diluting the stake of current shareholders.
Shares of the company rose 5% to $16.58 in morning trading.