“And what if we use it as a bridge finance to, say, buy back some of the 5% bonds and then sell 1% bonds? “
The rate we have to pay on bonds is not set by our whim. It’s set by at what interest rate will get the buyers to buy. Who is going to buy 1% bonds???, and how and why would they get priced at `1%??
They will buy 1% bonds when cash pays less.