Google's bond offering a hot buy
The search giant plans its first-ever bond offering for later this afternoon, and demand is riding high.
The funny thing is that the bonds aren't exactly paying well; there are definitely better ways to make money. But this is Google we're talking about, and that's enough to get investors plenty worked up.
"People aren't going to do very much credit analysis, they're going to look at the balance sheet, and look at the cash, and say 'This is ridiculous' and put their orders in, and probably big orders," one money manager told Bloomberg. "It will be scooped up like nobody’s business."
Google had about $35 billion in cash at the end of last year and has never tapped the corporate bond market. But it's so cheap to borrow now, so why not. Google will use the $3 billion sale on general corporate uses and to pay back short-term debt.
There's an "insatiable appetite for corporate debt" among investors, The Wall Street Journal notes. The deal will sell three $1 billion portions in three-year, five-year and 10-year notes.
The three-year notes will likely yield 0.33 percentage point more than Treasuries of similar maturity. The spread will be 0.43 percentage point on a five-year note and 0.58 percentage point on a 10-year piece.
"All three pieces were launched narrower than preliminary pricing guidance had suggested, indicating good demand from investors," the Journal reports. Orders will likely hit $10 billion, one source told the Journal. Google could have easily doubled its offering, but decided against it.
The bonds are expected to be sold later today by Citigroup (C), JPMorgan Chase (JPM) and Goldman Sachs (GS).
MORE ON MSN MONEY
VIDEO ON MSN MONEY
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] The stock market finished an upbeat week on a mixed note. The S&P 500 added just over a point, holding its weekly gain at 1.0% while the Nasdaq lost 0.4%.
The major averages began the day on an upbeat note, but relinquished their opening gains during the first 90 minutes of action. The early sentiment was boosted by a better-than-expected nonfarm payrolls report for February (175K versus Briefing.com consensus 163K), but a closer look into the report suggested that ... More
More Market News
|There’s a problem getting this information right now. Please try again later.|