Moody’s Raises $750 Million in Two-Part Debt OfferingMatt Robinson
Moody’s Corp., owner of the second-largest credit rater, raised $750 million in debt that increased 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 sold $450 million of 2.75 percent notes due in 2019 to yield 105 basis points more than similar-maturity Treasuries and $300 million of 5.25 percent 30-year bonds that pay 185 basis points more than benchmarks, according to data compiled by Bloomberg. 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. Today’s sale raised Moody’s cash from $1.79 billion on March 31, Bloomberg data show. 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.
Standard & Poor’s, the largest credit-rating company by revenue, grades Moody’s BBB+. Moody’s doesn’t rate its own debt.
Shares have rallied 14 percent to $89.58 this year, near the all-time high, 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.
A basis point equals 0.01 percentage point.