In a strategic move to reduce interest outflow, CBS Corporation ( CBS - Analyst Report ) announced the simultaneous offering and redemption of debt. The company announced a two-part offering of $400 million and $500 million priced at 1.95% due 2017 and 4.85% due 2042, respectively.

Subsequently, the company declared the redemption of its $400 million outstanding 8.2% debt due May 15, 2014 and $338 million, 5.625% debt due August 15, 2012.

The move makes perfect sense as borrowing costs have gone down despite the significant disruption in the global credit markets. In fact this is not the first time that the company has exchanged its higher-interest debt for lower-interest debt.

In February, the company took the similar stance and came up with a new debt offering of $700 million priced at 3.375% due 2022 and subsequently declared the redemption of its $700 million outstanding 6.75% debt due March 27, 2056.

Earlier, the company posted strong first-quarter 2012 results. The quarterly earnings of 54 cents a share were way ahead of the Zacks Consensus Estimate of 44 cents and surged 86% from 29 cents earned in the year-ago quarter. Revenues jumped 12% year over year to $3,924 million.

CBS Corporation ended the quarter with cash and cash equivalents of $794 million and long-term debt of $5,902 million. The company incurred interest expense of $110 million during the quarter.

Currently, we have a long-term ‘Outperform’ rating on the stock. Moreover, CBS Corp. which faces stiff competition from News Corporation ( NWSA - Analyst Report ) and Comcast Corporation ( CMCSA - Analyst Report ) , holds a Zacks #1 Rank that translates into a short-term ‘Strong Buy’ rating.