Crocs Hits Junk-Bond Market to Fund Stock Buybacks

Crocs Inc., the colorful clog maker, hit the junk-bond market Thursday, borrowing $350 million at cheap rates to fund stock buybacks, according to a person with knowledge of the matter.

The company, which has seen a rise in its popularity thanks to the likes of Justin Bieber and rapper Bad Bunny, sold the notes at a yield of 4.125%, slightly below earlier price discussions in the range of 4.25%, said the person, who asked not to be identified because the details are private.

Niwot, Colorado-based Crocs raised the same amount -- $350 million -- from its debut high-yield deal earlier this year, boosting the size of the offering amid strong demand. The bond, which pays interest of 4.25%, has since rallied in price to about to 103.8 cents, according to Trace pricing.

Companies have been selling debt at a rampant pace this year, capitalizing on cheap debt to fund everything from dividend payouts, acquisitions and leveraged buyouts, to replacing more expensive borrowings taken on earlier in the pandemic. Average junk-bond yields crept up to a two-week high of 4.02% on Wednesday, according to Bloomberg Barclays index data, but are still close to record lows of 3.53%.

Morgan Stanley managed the sale of the 10-year Crocs bond, which may also be used for capital expenditures, working capital, the repayment of debt and acquisitions, said the person.

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