Walt Disney Co , JPMorgan Chase & Co and United Parcel Service Inc were among seven major U.S. companies that accepted a big rise in their borrowing costs to issue bonds on Thursday, as the coronavirus outbreak roiled credit markets.
The companies, that also included Citigroup Inc , Morgan Stanley , Northrop Grumman Corp and MetLife Inc , raised a combined US$18.6 billion through the issuance of investment-grade bonds, according to Refinitiv IFR data.Disney issued five new bonds, including a US$1.25 billion 10-year loan which priced at a 270 basis point premium to U.S. Treasuries at a 3.8per cent yield. By comparison, Disney raised US$2 billion in September with a premium of only 70 basis points and a yield of around 2.
The novel coronavirus has infected more than 200,000 people globally but may be in its early stages in the United States. It has prompted many countries to order businesses to close and restrict movements of entire populations to limit its spread. Citigroup issued debt with a maturity of 21 years, longer than anything it has issued in at least 12 months, according to Refinitiv IFR records. The 2041 debt was at a 350 basis point premium to U.S. Treasuries, compared to 90 basis points on debt maturing in 2031 done in January.
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