Exxon Mobil Raises $9.5 Billion In New Debt

By Amit Chowdhry ● April 14, 2020
  • Exxon Mobil announced it has raised $9.5 billion in new debt. And Exxon paid a lower price to borrow than it did in a similar debt deal nearly four weeks ago.

Exxon Mobil Corporation (NYSE:XOM) announced it has raised $9.5 billion in new debt, according to Reuters. Interestingly, Exxon paid a lower price to borrow than it did in a similar debt deal nearly four weeks ago.

However, the borrowing costs for Exxon were still higher than before the coronavirus outbreak. The oil giant had raised $9.5 billion by selling 5 different bonds with a variety of durations ranging from 5 years to 31 years, up from $9 billion which it had originally planned to raise.

“In an example of how the company’s borrowing costs have come down in recent weeks, it priced a 10.5-year bond worth $2 billion at a 185 basis-point premium to U.S. Treasuries with a 2.61% yield. On March 17, Exxon sold $2 billion in debt with a 10-year duration where the premium to U.S. Treasuries was 240 basis points and the yield was 3.482%,” Reuters wrote in its report. “In August last year, Exxon raised $1.25 billion through a 10-year bond with a premium to U.S. Treasuries of just 75 basis points and a yield of 2.44%.”

Exxon decided to stock up more on cash while the market is open to issuers of new debt. And in a regulatory filing, Exxon said it will be using the proceeds for “general corporate purposes.”

Exxon Mobil is not the only major company to issue new debt this week. General Electric, Walgreens Boots Alliance, and Cinemark Holdings also raised new debt.