Twitter is re-entering the bond market with news that has offered US$1 billion of high-yield 8-year bonds in a private placement.
Dow Jones reported that the funds will be used for general corporate purposes, including capex, investments, to repay debt, to buy back its stock, working capital and for potential acquisitions.
“Currently, however, Twitter does not have any agreements with respect to any such material strategic transactions or acquisitions,” the company said in a statement.
Twitter announced at its earnings call in early February that will embark on a $4 billion stock buyback plan. Some of the new funds could be used in that program. It said it would have a $2 billion accelerated repurchase program and another $2 billion bought back over time.
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Ratings agency Moody’s assigned the new notes a Ba2 rating, saying they will be on equal footing with the existing unsecured notes.
“The proposed issuance of $1 billion of senior unsecured notes due 2030 will increase gross leverage but Moody’s anticipates that cash levels will be sustained above the company’s $5 billion in pro forma debt,” Moody’s said.
Twitter made its debut in the junk-bond market in 2019, raising $US700 million from a deal that received more than $US6 billion in orders from investors according to Bloomberg. It was sold at a yield of just 3.875 per cent — one of the lowest ever seen — and is currently yielding about 4.2 per cent, according to Trace data.
