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PayPal Raises $4B In Debt Offering As Business Surges During Pandemic

PayPal Holdings Inc. (NASDAQ: PYPL) on Monday announced that it raised $4 billion in a corporate bond offering.What Happened The digital payments company's 10-year bonds, with an aggregate principal amount of $1 billion, were priced at 160 basis points over the Treasury's under the deal to yield about 2.3%, it said. This is the same amount as the cut PayPal takes from its customers in the United States.Another $1 billion each has been raised in 3-year bonds with pricing aimed at a yield of $1.35%, 5-year bonds with a yield of $1.65%, and 30-year bonds with a yield of 3.25%.The offering is expected to close May 18, PayPal said.The amount raised from the bonds will be used to pay down a $3 billion loan in a five-year revolving credit line and for other general corporate purposes, the California-based company said.According to MarketWatch, which first reported the news, S&P Global Ratings has deemed the bond offering to be "leverage neutral" for PayPal, which is "showing a much lower impact from COVID-19 than its peers."The company reported mixed earnings for the first quarter this year, with earnings per share of 66 cents, well below the analyst consensus of 75 cents.Nevertheless, analysts noted a regulatory write-off, 20% revenue growth in April, and May 1 being its largest transaction day in history as signs of its growth during and beyond the pandemic.Price Action PayPal shares closed nearly 0.7% lower at $143.96 on Monday. The shares dipped 0.2% in the after-hours session at $143.66.See more from Benzinga * Quidel's Recently Approved Antigen Test For Coronavirus Is 'Game Changer,' Former FDA Chief Says * Trump, Intel, TSMC Plan US 'Self-Sufficiency' In Semiconductors As Coronavirus Gives Supply-Chain Scare * Tesla's China Sales Dropped 64% In April, Even As Wider Market Recovered, CPCA Says(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved. Read More...

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="PayPal Holdings Inc. (NASDAQ: PYPL) on Monday announced that it raised $4 billion in a corporate bond offering.” data-reactid=”19″>PayPal Holdings Inc. (NASDAQ: PYPL) on Monday announced that it raised $4 billion in a corporate bond offering.

What Happened

The digital payments company’s 10-year bonds, with an aggregate principal amount of $1 billion, were priced at 160 basis points over the Treasury’s under the deal to yield about 2.3%, it said. This is the same amount as the cut PayPal takes from its customers in the United States.

Another $1 billion each has been raised in 3-year bonds with pricing aimed at a yield of $1.35%, 5-year bonds with a yield of $1.65%, and 30-year bonds with a yield of 3.25%.

The offering is expected to close May 18, PayPal said.

The amount raised from the bonds will be used to pay down a $3 billion loan in a five-year revolving credit line and for other general corporate purposes, the California-based company said.

According to MarketWatch, which first reported the news, S&P Global Ratings has deemed the bond offering to be “leverage neutral” for PayPal, which is “showing a much lower impact from COVID-19 than its peers.”

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The company reported mixed earnings for the first quarter this year, with earnings per share of 66 cents, well below the analyst consensus of 75 cents.” data-reactid=”26″>The company reported mixed earnings for the first quarter this year, with earnings per share of 66 cents, well below the analyst consensus of 75 cents.

Nevertheless, analysts noted a regulatory write-off, 20% revenue growth in April, and May 1 being its largest transaction day in history as signs of its growth during and beyond the pandemic.

Price Action

PayPal shares closed nearly 0.7% lower at $143.96 on Monday. The shares dipped 0.2% in the after-hours session at $143.66.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="See more from Benzinga” data-reactid=”30″>See more from Benzinga

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.” data-reactid=”35″>© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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