Dow debt offering three times oversubscribed

NEW YORK, May 8 (Reuters) - Dow Chemical Co's (DOW.N: Quote, Profile, Research) $6 billion note offering was around oversubscribed by threefold, according to sources familiar with the situation.

The company sold $6 billion of debt in a three-part sale late on Thursday. But sources said there was as much as $20 billion of interest in the offering.

Dow has issued equity, sold debt, slashed its dividend, sold a salt business and is looking at more asset sales in order to pay down the hefty debt load it incurred through its acquisition of Rohm And Haas earlier this year.

That includes $1.35 billion of notes to be offered by hedge fund Paulson & Co. and trusts owned by the Haas family, which will go toward buying back perpetual preferred shares Paulson and the Haas family received in the Rohm And Haas deal.

Coupled with the perpetual preferred shares retired in the equity offering earlier this week, Dow said that portion of the note offering should allow it to retire all the perpetual and preferred shares issued in the Rohm deal.

Dow Chief Executive Andrew Liveris said that a substantial amount of proceeds from the note offering would be used to pay down the company's $9.2 billion bridge loan, which the company plans to pay off by the end of the year.

Corporate bonds have rallied strongly for weeks as signs of an improving economy increased investors' risk appetite and as results of the government's stress tests on banks relieved concerns about the financial sector.

As corporate bond prices rose, yields, which move in the opposite direction, have fallen to 7.1 percent on average, down from a peak of 9.3 percent in October, according to Merrill Lynch data, making borrowing less costly for issuers.

Shares of Dow were up $1.14, or 7.2 percent, at $16.89 in afternoon trading on the New York Stock Exchange. (Reporting by Michael Erman and Dena Aubin; Editing by Derek Caney)