Capitol Federal Financial of Topeka, Kan., has refinanced $2.4 billion of its fixed-rate borrowings to boost future earnings.
However, the move, announced Monday, will cost the $8.5 billion-asset company $148.2 million of after-tax charges and force it to post a loss for both its fiscal fourth quarter and its full fiscal year, which will end Sept. 30.
It said the $2.65 billion of new borrowings have a shorter average maturity and an average cost of 3.78%, while the $2.4 billion it refinanced had an average cost of 6.13%. The refinancing will lower Capitol Federal's annual interest expenses by $47.5 million.
Ronald J. Peterson, an analyst with Moors & Cabot Inc. in Chicago, said Capitol Federal's annual earnings would likely increase by 42 cents a share, because of the money it will save through the refinancing.
Capitol Federal's stock was trading at $31.06 a share late Monday, up nearly 6% from Friday's close.
