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Essay / Research Paper Abstract
This 5-page paper presents information on Wal-Mart's capital and debt financing, based on literature, and some of the risks and rewards it is taking on through making these particular financing decisions. Bibliography lists 3 sources.
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5 pages (~225 words per page)
File: D0_MTwalfin.rtf
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and long-term financing decisions have, in fact, involved global issues. During the latter part of 2004, for example, Wal-Mart completed its first global offering in the United Kingdom by issuing
one billion pounds in sterling bonds (at 5 1.4 percent) (Anonymous, 2005). Then later on, during January 2005, Wal-Mart issued an additional $1 billion in 4 percent global notes (five
year deadline) that were priced at 40 basis points over comparable treasuries (Anonymous, 2005). The reason for courting the overseas bond markets,
notes the literature is because Wal-Mart was interested in financing its debt program as economically as possible, so it turned to foreign markets for assistance (Anonymous, 2005). The proceeds of
that particular debt financing, noted experts at Wal-Mart, would be used for "general corporate purposes" (Anonymous, 2005, 1). This was not, however,
Wal-Marts first foray overseas -- during 2002, the company had "put its name" on a $5 billion Euro CP program issued through Lehman Brothers (Anonymous, 2002). The reason for this
particular program, according to Wal-Marts treasurer, was working toward an increase in liquidity by tapping into European markets (Anonymous, 2002). This particular program was issued in addition to the $10
billion (USD) U.S. program, which offered oustandings of more than $2 billion each year (Anonymous, 2002). During the earlier part of the
millennium (during 2000), Wal-Marts long-term debt (outstanding bonds) were reaching maturity, and the company planned to refinance $2.5 billion of that debt, through a combination of new bonds and commercial
paper (as in stocks and other equity) (VanderZanden, 2000). At this point, therefore, though Wal-Mart still seems to be issuing debt through
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