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Deckers Outdoor Corp. Message Board

  • westchesterweekendwarriors westchesterweekendwarriors Nov 5, 2012 10:49 AM Flag

    What is DECK's Interest Rate on Long Term Loans Taken From "Credit Facility"

    Does anyone know? As Mark Cuban argues, if the interest rate is effectively close to zero, why the concern about the long term debt? Buying back an asset at bargain basement prices would seem to be a good use of leveraging.

    Sentiment: Strong Buy

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    • Excuse my saracasm, but way to catch on bro. They are probably borrowing at a long term rate of less than 2.5%(based on the company's excellent balance sheet). That is what I, Jaques, and a few others keep pointing out; this company's product is in very high demand(despite the flat, not negative, revenue growth over the last year) so too use the money we had in the bank and then borrown another 200M at rock bottom rates to buy back what will amount to 20% of the comany, is beautiful strategy. This is effective management at its best. When the market gives you lemons(DECK's stock price), go out and make lemonade(buyback the stock).

      Z

 
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