Tags: Moodys | Debt | Cash | Pile

Moody's to Sell More Debt, Build $2 Billion Cash Pile

Monday, 07 Jul 2014 02:41 PM

Moody’s Corp., owner of the second-largest credit rater, is planning to raise $750 million in debt that would increase cash to more than $2 billion for the first time since it was spun off by Dun & Bradstreet Corp. in 2000.

The New York-based company may sell $450 million of debt due in 2019 to yield 105 basis points more than similar-maturity Treasurys and $300 million of 30-year bonds that pay 185 basis points more than benchmarks, according to a person with knowledge of the offering, who asked not to be identified because terms aren’t set. Proceeds will be used for general corporate purposes that may include share buybacks, acquisitions or debt repayment, the company said in a regulatory filing.

The rater, whose founder John Moody helped start the credit-rankings business in 1909, has been increasing its cash level from $245.9 million in 2008. Monday’s sale would raise Moody’s cash from $1.79 billion on March 31, according to data compiled by Bloomberg. The company earlier marketed $600 million of bonds.

Moody’s last sold debt in August, raising $500 million of 4.875 percent 10.5-year notes. Those securities traded at 107.6 cents on the dollar June 2 to yield 3.92 percent, or a spread of 139.5 basis points, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. A basis point is 0.01 percentage point.

Standard & Poor’s, the largest credit-rating company by revenue, grades Moody’s BBB+. Moody’s doesn’t rate its own debt.

Moody's shares have rallied about 14 percent this year, as companies boost demand for ratings by taking advantage of borrowing costs that reached record lows for high-yield debt this year and in 2013 for investment-grade obligations.

Monday afternoon, Moody's shares were down 41 cents at $89.61.

 

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Moody's Corp., owner of the second-largest credit rater, is planning to raise $750 million in debt that would increase cash to more than $2 billion for the first time since it was spun off by Dun & Bradstreet Corp. in 2000.
Moodys, Debt, Cash, Pile
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2014-41-07
Monday, 07 Jul 2014 02:41 PM
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