“The sharp shift in Treasury yield rates over the past few weeks means time is of the essence for those companies looking to undertake a capital return program and fund it with bonds.  The rate rise increases the cost of funding and limits the ability to take advantage of an arbitrage between the current lower cost of issuing debt versus paying dividends on shares they could otherwise buy back with the fund raising.  ‘There is the obvious arbitrage there,’ said one head of debt capital markets at a Wall Street bank. ‘Why pay a dividend in the 3% to 5% range, when you can issue bonds at 2% or less and buy back those shares?'”

http://uk.reuters.com/article/2013/06/03/uscorpbonds-tech-emc-idUKL1N0EF1VA20130603

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