Oracle announces five-part benchmark bond

NEW YORK: Tech giant Oracle announced a five-part benchmark US dollar bond sale ahead of pricing later on Wednesday.
The borrower is approaching investors with five, seven, 10, 20 and 30-year bonds, with initial price talk set at T+110bp area, T+125bp area, T+135bp area, T+165bp-170bp area and T+185bp area.
Proceeds will be used for general corporate purposes, including stock repurchases, dividend payments, future acquisitions and debt refinancing.
Ratings are A1/AA-/A+. Bank of America Merrill Lynch and JP Morgan are acting as active bookrunners, while Citigroup, HSBC and Wells Fargo are coming in as passive bookrunners.

Two brokers told IFR the new Oracle issue would likely be in the range of US$8-$10bn.
Oracle was last in the US dollar market in April 2015 when it raised US$10bn - one of the biggest in 2015 - to mostly finance share buybacks. Those bonds are among the best pricing benchmarks for the new Oracle deal.
Oracle's 2.8% 2021 bonds were trading around G+70bp Wednesday. The 2.95% 2025s were spotted at G+91bp, the 3.9% 2035s at T+135bp and the 4.125% 2045s at T+147bp.
At initial price thoughts, the new issue looks to be offering a new issue concession of 35-40bp.

The Oracle deal would be the second jumbo deal in the US investment-grade market this week after brewer Molson Coors raised US$5.3bn to finance an acquisition on Tuesday.
The deals are the first to emerge since Britain voted to leave the European Union last week.
Market conditions are favorable for US issuers with the CDX IG 26 index 2.35bp tighter on Wednesday at 85.7bp, according to Tradeweb. Lower Treasury yields in the wake of the Brexit vote - 10-year Treasury yields are around 1.47% - have also made all-in borrowing costs cheap for corporates.