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Google Gets into the Debt Game

17 May

Big deal here today: Google has closed it’s very very first Corporate Debt offering ever.  This cash-rich company has been on a stampede buying up companies like adMob and slide and YouTube.  Even Android came from an acquisition.  So it makes sense that given its healthy businesses and its their huge cash reserves, Google ought to take advantage of credit markets.

Despite the stock’s flat performance over the past year investors apparently are piqued as decent demand has Google getting money for nearly as cheap as the government does.  Wall Street Journal describes the deal, “The three-year piece was sold with a risk premium of 33 basis points over Treasurys to yield 1.258%; the five-year at 43 basis points, yielding 2.241%; and the 10-year was priced with a spread of 58 basis points over Treasurys, yielding 3.374%”

Orders came in at over 10 billion for this 3 billion offering, with such apparent voraciousness that Google is now swimming in free money.  So the question is: What are they going to buy next?

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Posted by on May 17, 2011 in Uncategorized

 

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