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Oracle's bond concession attracts investors

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July 13
5:25 AM 2013

A new issue concession of Oracle attracted the attention of many investors last Tuesday. "Oracle came out with a very nice concession, at least at the initial price thoughts stage," according to one anonymous investor.

The software giant placed a US$3 billion deal on the table. However, the company attracted US$13 billion. This was a sign that investors were willing to shell out money again after an extended dry period in issuance.

Oracle placed the initial price thoughts at 110 and 125 basis points over Tresuries. The former was for its 5.5-year notes which amounted to a total US$1.5 billion. The latter was for its 10-year notes that totaled US$1 billion.

In addition, Oracle also offered 5.5-year floating-rate notes amounting to US$500 million. The price was equivalent to the fixed-rate tranche, except that it was spread over Libor.

The transaction will be used to fund the company's stock buy-back program. The program, which was announced last month, was worth US$12 million.

Aside from Oracle, four other deals launched last Tuesday in the US primary market.

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