The “cost of protection” in FedEx Corp (FEDEX) rose yesterday following the sale of fixed- and floating-rate notes that totaled US $1.6 billion.
The proceeds of the offering will be used to pay down the short-term borrowings that funded the acquisition of Kinko’s, a copy-center operator, FedEx said.
Moody’s rated the new issue Baa2 with a negative outlook, citing the high price of the acquisition and its uncertain impact on the FedEx group. FedEx Corp is a holding company that sits on top of four operating companies, including Kinko’s, that guarantee all of the outstanding debt.