Wary St. John Knits Reduces Daily Bond Sales
Worries that short-term interest rates will be raised today by the Federal Reserve Board in an effort to slow inflation chilled bond sales Tuesday, causing a number of companies including Irvine investment group St. John Knits International Inc. to reduce daily bond sales.
St. John Knits International, a group set up to buy upscale clothing manufacturer St. John Knits Inc., cut its sale about 20% to about $130 million. The company is selling 10-year notes at 12.25% to 12.5% interest to fund the acquisition and is expected to hold another sale later this week.
Some buyers worry that higher interest rates and slower economic growth could hurt company earnings and credit ratings and lead to more defaults.