By Lynn Adler
NEW YORK, May 17 (Reuters) - Trucking and logistics company Ryder System Inc sold its second $350 million debt offering of the year on Tuesday, locking in low funding costs for six years to replace maturing debt and invest in its rental fleet.
The new 3.5 percent senior unsecured notes maturing June 2017 were priced to 3.533 percent, or 175 basis points more than comparable Treasuries. The yield premiums narrowed 5 basis points from initial spread talk.
The last time Ryder sold a 6-year issue, in April 2005, the coupon was 1-1/2 percentage points higher, according to Ryder's web site.
'Treasuries are at historic lows ... as we look out over the next six years we're going to look fondly at 3.50 percent,' Ryder Treasurer Dan Susik told Reuters.
Ryder had been selling smaller note offerings of between $175 million and $300 million between 2005 and 2010.
Proceeds of the new larger deals will be used to replace two bond issues totaling $375 million that matured in late April and early May, Susik said.
'Also this year, with the economic recovery, we're investing almost $600 million into our rental fleet,' to increase the size and refresh some of the older vehicles, he added.
The company had about $3.5 billion debt outstanding as of the end of the first quarter.
Its future funding needs this year depend on the level of organic growth, any potential acquisitions and its short-term funding levels, Susik said.
Tuesday's offering was several times oversubscribed, he added.
Ryder notes are rated BBB+ by Standard & Poor's, A- by Fitch, Baa1 by Moody's Investors Service.
Ryder shares dipped 0.4 percent on Tuesday to $54.36 and are up 3.7 percent so far this year.
(Reporting by Lynn Adler; editing by Andre Grenon) Keywords: RYDER/ (lynn.adler@thomsonreuters.com +1 646 223 6307; Reuters Messaging: lynn.adler.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
NEW YORK, May 17 (Reuters) - Trucking and logistics company Ryder System Inc sold its second $350 million debt offering of the year on Tuesday, locking in low funding costs for six years to replace maturing debt and invest in its rental fleet.
The new 3.5 percent senior unsecured notes maturing June 2017 were priced to 3.533 percent, or 175 basis points more than comparable Treasuries. The yield premiums narrowed 5 basis points from initial spread talk.
The last time Ryder sold a 6-year issue, in April 2005, the coupon was 1-1/2 percentage points higher, according to Ryder's web site.
'Treasuries are at historic lows ... as we look out over the next six years we're going to look fondly at 3.50 percent,' Ryder Treasurer Dan Susik told Reuters.
Ryder had been selling smaller note offerings of between $175 million and $300 million between 2005 and 2010.
Proceeds of the new larger deals will be used to replace two bond issues totaling $375 million that matured in late April and early May, Susik said.
'Also this year, with the economic recovery, we're investing almost $600 million into our rental fleet,' to increase the size and refresh some of the older vehicles, he added.
The company had about $3.5 billion debt outstanding as of the end of the first quarter.
Its future funding needs this year depend on the level of organic growth, any potential acquisitions and its short-term funding levels, Susik said.
Tuesday's offering was several times oversubscribed, he added.
Ryder notes are rated BBB+ by Standard & Poor's, A- by Fitch, Baa1 by Moody's Investors Service.
Ryder shares dipped 0.4 percent on Tuesday to $54.36 and are up 3.7 percent so far this year.
(Reporting by Lynn Adler; editing by Andre Grenon) Keywords: RYDER/ (lynn.adler@thomsonreuters.com +1 646 223 6307; Reuters Messaging: lynn.adler.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.