Answer:
First we must analyze how an increase in market rates affect the price of bonds:
Suppose that the market rate is 8% and we offer 8% bonds, annual payment, 15 years to maturity. We are using the market rate since we do not like to calculate amortizations of premium or discount prices.
I.e. the market price = par value of the bond
If the FED suddenly decides to increase interest rates by 1% and since we are issuing our bonds in 1 month, we will have to sell them at a different market price:
PV of face value = $1,000 / 1.09¹⁵ = $274.54
PV of coupon payments = $80 x 8.0607 (PV annuity factor, 9%, 15 periods) = $644.86
The market price of our bond will decrease to $919.40, so our borrowing costs have increased. The issue here is that market rates are not associated to any specific company, maybe Apple is large enough to make a difference, but that is an exception, not the rule.
Whatever you do as a CFO will not allow your company to raise money at a lower interest rate after the FED acts. The only thing that you can do right now is hurry up the bond issuance. You must issue the bonds immediately (like yesterday) because the market rate will increase because it expects the FED's raise. The sooner you issue the bonds, the lower the negative impact.
Market's act very quickly, and 1 minute after the FED made its announcements, the market rate had already increased (not the whole 1% though). It doesn't matter if the raise will take place in one month, bonds maturity is measured in years. But the adjustment made to the market rate is not complete right now, probably the market rate increased to 8.5% or so, but as more time passes, the closer the rate will get to 9%.
