Staples plans biggest bond offering ever

FRAMINGHAM, Mass. – Staples Inc., the world’s largest office-supplies retailer, plans to raise $1.5 billion in its biggest offering of corporate bonds and its first in six years.
The five-year notes may yield 9.75 percent, according to a person familiar with the offering who declined to be identified because terms aren’t set.
Framingham, Mass.-based Staples is tapping the bond market to pay down existing debt a month after reporting that third-quarter profit dropped 43 percent because of costs to acquire a Dutch distributor and a slump in consumer spending. Chief Financial Officer John Mahoney on Dec. 2 said Staples would draw on the most attractive resources in the market, including bond offerings and bank loans, to replace short-term debt with permanent financing.
Average yields on debt with ratings similar to Staples have dropped 70 basis points to 9.19 percent since the company released its earnings, according to Merrill Lynch & Co. A basis point is 0.01 percentage point. &#8226