Patriot Update

Companies are racing the clock to hand out billions in special dividends before year end—and some of them are taking on debt to do it.

The latest is Costco [COST 102.43 5.92 (+6.13%) ], which announced a $7-a-share payout to stockholders Wednesday and is issuing bonds to pay for the $3 billion dividend. (Read More: Costco to Pay Special Dividend)

Fearing a tripling of dividend tax rates next year, companies have found one-time payouts and early payments of quarterly dividends as a way to beat some of the impact of the “Fiscal Cliff.”

Taking advantage of super-low interest rates, companies have been issuing debt at a record rate this month. Some say they plan to use the proceeds to fund dividends and share repurchases.