Exxon Sells $5.5 Billion in First Bond Sale in Decades

Exxon Mobil Corp. (XOM) sold $5.5 billion in its biggest bond offering on record as the world’s largest energy producer by market value ends a more than two-decade hiatus from the U.S. bond market.

Exxon, which commands top AAA credit ratings from Moody’s Investors Service and Standard & Poor’s, issued fixed- and floating-rate notes in a five-part sale. The Irving, Texas-based company may use proceeds to finance capital spending, for acquisitions and to refinance commercial paper borrowings, according to a regulatory filing today.

The new securities will add to the company’s $22.7 billion of total debt, which accounted for about 39 percent of its trailing 12-month cash flow at year-end, according to data compiled by Bloomberg. That’s a lower leverage level than the 71-percent ratio at Microsoft Corp. (MSFT), which has similar rankings of Aaa at Moody’s and AAA at S&P.

Exxon sold $1 billion of 10-year, 3.176 percent coupon bonds that yield 48 basis points more than similar-maturity Treasuries, $1.75 billion of five-year debt with a 1.819 percent coupon and a yield spread of 25 basis points and $1.5 billion of three-year, 0.921 percent debt that pays 15 basis points more than benchmarks. A basis point is 0.01 percentage point.

The deal also includes $750 million of three-year floating-rate securities that pay four basis points more than the three-month London interbank offered rate and $500 million of five-year floating-rate debt yielding 15 basis points more than that benchmark. Libor, the rate at which banks say they can borrow from one another, was set at 0.23 percent today.

Exxon last issued bonds in 1993, according to Bloomberg data based on dollar-denominated sales of at least $250 million and restricted to U.S. units.

To contact the reporter on this story: Charles Mead in New York at cmead11@bloomberg.net

To contact the editors responsible for this story: Shannon D. Harrington at sharrington6@bloomberg.net Caroline Salas Gage, John Parry

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