Murphy Oil Corp. of El Dorado is using a $1.5 billion bond sale, announced in a filing with the U.S. Securities and Exchange Commission on Tuesday, to help fund its previously announced $2.50 per share dividend payment.
In doing so, Murphy Oil becomes one of several U.S. companies (and that includes Arkansas' own Wal-Mart Stores Inc. and Dillard's Inc.) that's reacting to uncertainty around the coming "fiscal cliff."
CNBC describes Murphy's play:
Fearing a tripling of dividend tax rates next year, companies have found one-time payouts and early payments of quarterly dividends as a way to beat some of the impact of the "Fiscal Cliff."
Taking advantage of super-low interest rates, companies have been issuing debt at a record rate this month. Some say they plan to use the proceeds to fund dividends and share repurchases.
Christopher Reich of Thomson Reuters IFR points out, for instance, that Murphy Oil in its prospectus Tuesday also said that it would use the proceeds of its more than $600 million offering of 5-year, 10-year and 30-year bonds to fund its previously announced special dividend, among other things.
You can read more about Murphy's plans in its prospectus here.
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