Exxon sells $5.5B in first bond sale in two decades


Exxon Mobil (XOM) sold $5.5B in its biggest-ever bond offering as the energy giant ended a more than two-decade absence from the U.S. bond market.

AAA-rated XOM issued fixed- and floating-rate notes in a five-part sale, and plans to use the proceeds to finance capital spending, for acquisitions and to refinance commercial borrowings.

The new securities will add to XOM’s $22.7B of total debt, which accounts for a relatively low ~39% of its trailing 12-month cash flow at year-end, according to Bloomberg.

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Comments (8)
  • Bob Carl
    , contributor
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    This is a smart move. It locks in today's low interest rates and reduce dependence on commercial paper borrowing.
    17 Mar 2014, 05:58 PM Reply Like
  • OpenRoad Capital
    , contributor
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    More money for buybacks good news.
    17 Mar 2014, 07:44 PM Reply Like
  • joelpoor
    , contributor
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    Xom rocks for moves like this. In the big scheme of things this means nothing. But the timing of this says so much about their knowledge of external environmental strategy. Too early like buying xto is so much better than too late.
    17 Mar 2014, 09:15 PM Reply Like
  • Mercury Value
    , contributor
    Comments (568) | Send Message
     
    Best capital allocators in the energy industry, bar none.
    18 Mar 2014, 12:14 AM Reply Like
  • bbro
    , contributor
    Comments (11234) | Send Message
     
    10 year Exxon bonds...3.18%.....
    18 Mar 2014, 08:20 AM Reply Like
  • Jefferson B
    , contributor
    Comments (2) | Send Message
     
    Everybody would soon realize how excellent XOM manages capital spending and asset allocation towards growth and expansion.
    18 Mar 2014, 11:31 AM Reply Like
  • User 353732
    , contributor
    Comments (5166) | Send Message
     
    XOM's dividend yield is 2.7% , which is lower than its bond yield. Investors who favor very safe yields might be persuaded to sell XOM stock to buy bonds.
    Other investors view XOM stock as a unique appreciating bond and will view the total return from this old stock as bond to be more attractive from the new bond.
    However, if XOM is using bond sales to finance stock repurchases(sell new bonds to buy back old " appreciating bonds") then the calculations about XOM's total risk/return profile become complicated.
    18 Mar 2014, 01:07 PM Reply Like
  • nomorehomes
    , contributor
    Comments (137) | Send Message
     
    Wow. XOM issued bonds. Interest rates are going to go up.
    18 Mar 2014, 09:28 PM Reply Like
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