Air Products & Chemicals will likely consider issuing commercial paper or a medium-term fixed-rate bond that it can convert to a floating-rate liability via a swap, according to Greg Weigard, assistant treasurer in Allentown, Pa. The international industrial gas and chemical company is looking to increase its percentage of floating-rate debt to 40-45% from approximately 25%, he said. It is looking to refinance $100 million of A3/A-rated bonds that mature in August.
The alternative to tapping the MTN market is drawing on its $600 million commercial paper program, Weigard explained. The company has available virtually all of the facility, which is led by Bank One, he said.
Air Products & Chemicals is in constant talks with investment banks about its options, Weigard said. He declined to name firms it is talking to but explained it would rely on its current relationships to choose banks for any deal. He also declined to elaborate on potential terms of a deal structure, noting it is unlikely the company will do anything before the debt is due on Aug. 1.
