Boston, MA 09/11/2014 (wallstreetpr) – While Twitter Inc (NYSE:TWTR) grew from infancy to adolescence and now; into a developed company, it is taking its first step towards debt sale to assist growing business. The company announced recently about its plan of raising approximately $1.5 billion through debt sale, for the first time.
Twitter to Offer Two Chunk Options
Twitter Inc (NYSE:TWTR) announced that it shall offer two parts of convertible bonds worth $650 million. The first portion will have a maturity date after 5 years and the other one will mature after 7 years. Initial buyers will get an advantage of purchasing $100 million more on every piece.
Twitter has failed to generate any profit ever since it went for IPO in November 2013. The San Francisco based company did not uncover its detailed plan regarding proceeds of the cash but announced that it will be used for corporate purposes.
Convertible Debt Market Attract Companies
As Twitter Inc (NYSE:TWTR) looks forward towards advertising business expansion, it has been acquiring various other businesses over 2013. Before it went public previous year, Twitter had also secured credit line worth $1 billion, which led to generation of approximately $2 billion.
Importantly, it must be noted that the companies are moving towards convertible-debt market for minting money, in the past few months. Investor’s chase for stock based investments and income generating assets has allowed companies to encash money.
In 2014, as of now, 96 companies listed on the U.S. stock exchanges, have managed to raise around $35.1 billion through sale of convertible bonds. This means that 2014 is the high-paced, biggest year for activities like these, since 2008.
Inexpensive Borrowing Allowing Tech Companies to Offer Debt
According to the analysts, Twitter’s activity was not something new, given the technology based companies like Google Inc (NASDAQ:GOOGL), eBay Inc (NASDAQ:EBAY) and Netflix, Inc. (NASDAQ:NFLX) are doing the same. This is happening because the borrowings have become simpler due to being inexpensive.
Management of the deal for Twitter is being done by JPMorgan Chase & Co. (NYSE:JPM), Morgan Stanley (NYSE:MS) and Goldman Sachs Group Inc (NYSE:GS).
