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Tags: twitter | junk | bond | frenzy

Twitter Junk Bond Frenzy Pushes Debt Sale Near Record Low Yields

Twitter Junk Bond Frenzy Pushes Debt Sale Near Record Low Yields
(Mohamed Ahmed Soliman | Dreamstime.com)
 

Thursday, 05 December 2019 01:31 PM EST

Twitter Inc. is poised to borrow at some of the lowest costs ever in the junk-bond market as investors clamor for a piece of the technology company’s debut sale.

Banks are marketing $600 million of eight-year bonds at a yield of about 3.875%, according to people with knowledge of the matter who asked not to be identified because the information is private.

That matches the yield Popeyes parent company Restaurant Brands International Inc. paid to borrow in September, and is the lowest for securities maturing in eight years or more in the U.S. high-yield market since at least 2014, according to data compiled by Bloomberg.

The inaugural bond, which is set to price Thursday afternoon in New York, has garnered more than $6 billion of investor orders, the people said. The heavy demand emphasizes how eager investors are to get their hands on higher paying securities, especially ones with BB tier ratings that carry less risk than lower-rated junk bonds.

Double-B rated notes have returned 14.1% this year through Wednesday, compared with the broader high-yield market’s 12.1% gain. Large cash-flow positive technology companies like Twitter are also a relative rarity in a market that’s become accustomed to deals from cash-burners like Netflix Inc. and Uber Technologies Inc.

Twitter (TWTR) and Restaurant Brands may have each other to thank for some of their junk bond market success. The fast-food operator brought its deal just weeks after Popeyes sold out of its famous chicken sandwich. Crowds descended onto stores eager to try a menu item that became a sensation on the microblogging site.

© Copyright 2024 Bloomberg News. All rights reserved.


StreetTalk
Twitter Inc. is poised to borrow at some of the lowest costs ever in the junk-bond market as investors clamor for a piece of the technology company's debut sale.
twitter, junk, bond, frenzy
261
2019-31-05
Thursday, 05 December 2019 01:31 PM
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