Home Depot is spending another $1 billion to accelerate its plans to buy back its own stock.
The Atlanta-based home improvement retailer announced this week that it will use half of a new $2 billion senior note issuance to buy back stock. The other half will be used to refinance other senior notes.
The $1 billion stock repurchase is in addition to the $2.5 billion of outstanding shares Home Depot previously announced it would buy in 2011, using excess cash.
In a written statement, chairman and CEO Frank Blake said returning capital to shareholders is one of the company's priorities, so Home Depot decided to "take advantage of the attractive interest rate environment" and buy back more shares.
Analysts noted the stock is near its 52-week high and questioned why the company would borrow to buy back stock when Home Depot is expected to generate substantial free cash flow this year.
Home Depot launched its stock repurchase program in 2002 and through the end of 2010 purchased $30.1 billion of its outstanding common stock. Home Depot's board has authorized it to repurchase $9.9 billion more.
The company's stock price rose 2.86 percent, to $37.70 a share, Tuesday.
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