Exxon Mobil Monday raised $9.5 billion in new debt, with the largest U.S. oil producer seeking to bolster its funds while debt markets stay open to new offers.
Exxon now paid a lower price to borrow than it did in a similar debt offer nearly four weeks ago, an indication of how investor confidence is gradually returning after a fall in energy values and a stock market plunge fueled by the coronavirus pandemic.
Nonetheless, borrowing costs for Exxon had been still more than earlier to the coronavirus outbreak.
Exxon made $9.5 billion by selling five different bonds with much more period starting from five years to 31 years, which it had initially planned to lift, indicating robust investor demand.
In an example of how the firm’s borrowing costs have come down in recent weeks, it priced a 10.5-year bond value $2 billion at a 185 basis-point premium to Treasuries with a 2.61% yield.
On March 17, Exxon released $2 billion in debt with a decade long interval where the premium to Treasuries was 240 basis points, and the yield was around 3.50%.
In August 2019, Exxon attracted $1.25 billion through a decade long bond with a premium to Treasuries of 75 basis points and a yield of 2.44%.
The new raise by Exxon comes as highly rated U.S. corporations have been betting on debt markets for cash flow at a record clip, stocking up on cash because of the uncertainty encircling the economic impact from coronavirus.