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PayPal Holdings Inc. (NASDAQ:PYPL) on Monday announced that it raised $4 billion in a corporate bond offering.
What Happened
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The digital payments company's 10-year bonds, with an aggregate principal amount of $1 billion, were priced at 160 basis points over the Treasury's under the deal to yield about 2.3%, it said. This is the same amount as the cut PayPal takes from its customers in the United States.
Another $1 billion each has been raised in 3-year bonds with pricing aimed at a yield of $1.35%, 5-year bonds with a yield of $1.65%, and 30-year bonds with a yield of 3.25%.
The offering is expected to close May 18, PayPal said.
The amount raised from the bonds will be used to pay down a $3 billion loan in a five-year revolving credit line and for other general corporate purposes, the California-based company said.
According to MarketWatch, which first reported the news, S&P Global Ratings has deemed the bond offering to be “leverage neutral” for PayPal, which is “showing a much lower impact from COVID-19 than its peers."
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reported the news, S&P Global Ratings has deemed the bond offering to be "leverage neutral" for PayPal, which is "showing a much lower impact from COVID-19 than its peers."
Why It Matters
PayPal and subsidiary Venmo">The company reported mixed earnings for the first quarter this year, with earnings per share of 66 cents, well below the analyst consensus of 75 cents.
Nevertheless, analysts noted a regulatory write-off, 20% revenue growth in April, and May 1 being its largest transaction day in history as signs of its growth during and beyond the pandemic.
Price Action
PayPal shares closed nearly 0.7% lower at $143.96 on Monday. The shares dipped 0.2% in the after-hours session at $143.66.
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.