Yesterday Google officially grew up in the eyes of institutional investors – it floated a $3 billion bond offering to pay off short-term obligations at better rates. Corporate borrowing rates are at near-record lows, this was a savvy time for Google to get itself out there. The company has $35 billion in cash as well.
The world’s biggest Internet-search company split the sale evenly between three-, five- and 10-year notes, according to data compiled by Bloomberg. The 1.25 percent, three-year notes yield 33 basis points more than similar-maturity Treasuries, the 2.125 percent, five-year debt pays a 43 basis-point spread, and the 3.625 percent, 10-year securities offer 58 basis points above benchmarks, Bloomberg data show.
The two big ratings agencies give Google some variations of AA, but the bonds priced and sold like AAA paper.