RSS

The Bulletin

Verizon raises billions in largest corporate-bond sale ever

Posting in Finance

Verizon Communications more than doubled the previous corporate-bond sale record by selling $49 billion in bonds yesterday, MarketWatch reports.

The company took on the debt to pay for part of a $130 billion buyout of Vodafone's 45 percent stake in Verizon Wireless, making Verizon the sole owner of Verizon Wireless.

The previous record for a corporate bond sale came earlier this year when Apple raised $17 billion.

So can we expect to see more companies turn to massive bond sales to raise funds and take advantage of historically low interest rates? The New York Times is skeptical:

Cheap financing has been available for years, and it has not yet spurred a boom in mergers and acquisitions, as many companies remain hesitant to do risky deals that may not pay off.

“If you do the deal only because it’s cheap, it’s like shopping on sale,” Ms. [Donna] Hitscherich [a finance professor at the Columbia Business School] said. “You go and buy the thing and you never wear it.”

The reason you might see more big deals like this? Interest rates are starting to climb again.

Read more: MarketWatch, New York Times

Photo: Flickr/Eric Hauser

— By on September 12, 2013, 6:22 AM PST

Tyler Falk

Contributing Editor

Tyler Falk is a freelance journalist based in Washington, D.C. Previously, he was with Smart Growth America and Grist. He holds a degree from Goshen College. Follow him on Twitter. Disclosure