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Lowe’s Ups Leverage to Buy Shares

Retailer sells $2 billion in bonds to finance stock repurchases.

By Charles Mead and Chris Burritt, Bloomberg | Updated on April 17, 2012

Lowe’s Cos. is raising $2 billion in the bond market to finance stock repurchases as the second-biggest U.S. home-improvement retailer boosts leverage to reward shareholders even as its profitability wanes.

Lowe’s sold five-, 10- and 30-year debt yesterday, five months after the company that sells products from flowers to washing machines issued $1 billion of notes. The retailer may use proceeds to buy back shares, according to a regulatory filing. Lowe’s plans to increase its leverage to as much as 2.25 times from 1.8 times, Robert Hull, Lowe’s chief financial officer, told an earnings conference call in November.

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