Record Week for Corporate Bond Offerings

Corporate America's urge to merge has fueled a borrowing binge.
Stephen TaubJanuary 13, 2006

During the past week, companies sold roughly $34 billion in debt in the U.S. bond market, according to data mostly compiled by Bloomberg. The fund-raising was led by Oracle Corp., whose $5.75 billion sale of notes was the largest corporate bond offering in nearly two years, according to the wire service.

“The most important theme emerging is a pickup in acquisition-related funding activity,” James Esposito, head of Goldman Sachs’s investment-grade syndicate, told Bloomberg.

Oracle sold floating rate notes, 5-year notes, and 10-year notes in a three-part deal that was upsized from $5 billion. Officials at the world’s third largest maker of computer software said it plans to use the proceeds from the offering to fund its purchase of Siebel Systems, as well as for acquisition-related transaction costs and for general corporate purposes, including stock repurchases and other acquisitions.

This was Oracle’s first trip to the bond market since 1997, according to Bloomberg. Citigroup Inc., JPMorgan Chase & Co., and Wachovia Corp. managed Oracle’s underwriting, noted Bloomberg.

KfW Group, Germany’s state-owned development bank, sold $3 billion worth of five-year notes, up from a previously planned $2 billion, according to the report. In addition, flooring manufacturer Mohawk Industries Inc. sold $1.4 billion worth of debt in a two-part deal.

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