Friday, December 5, 2008

Harvard vs. Corning

Harvard wins this round and it's not even a fair fight.

The first week of December 2008 brings us a perfect example of "raise money when you can, not when you have to."

Harvard University filed a prospectus this week to sell $600 billion in bonds. The proceeds will be used to pay down other (likely more expensive) debt and unwind some swaps. Bravo, well-played etc. Rates are low, Harvard's credit ratings are still high. Use that balance sheet.

Contrast that to Corning, who filed a mixed securities offering this week with the stock in the single digits for the first time since 2004. For Corning, equity is expensive down here. I'm not sure about this but I don't recall them raising money when the stock was above $25.

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