Occidental Petroleum sold $13 billion in debt to help finance the acquisition of Anadarko Petroleum. You can read about it on the internet.
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As I read through the news articles, Oxy went to the bond markets to get some money to help with the purchase - something like $13-15 billion; the market response was about $75 bn in offers. At the same time, Oxy bonds were downgraded to bottom of the investor grade level. SO there was about a 5x demand to buy bonds that are barely investment grade. Why? IS there really no other place to invest where the RoR would be less, but the risk would be a lot less? Again, I am not much of a corporate finance person, so I don't get it. Is the calculation that they can sell assets short term, and make cash from production in the next few years, and cut costs, to cover the new debt?
Not anything different than buying a house of $200K with $10K or nothing downpayment. You borrow to achieve a goal that is foundation for future financial success.
The only question is if you can afford the type of house you bought.
In Oxy's case the added debt will be covered almost immediately with the sales of assets. They don't have the cash to close the deal at the table but after they get control of Africa assets they have a buyer to cover most of the new debt. The question then is what else they sell to cover the rest.
As the books balance they keep the oil producing assets that fit and just like that it is a bigger company than 6 months ago and better fit to challenge the majors coming in the Permian.
Sad story with (In all likelihood) a tearful ending. Borrowing your path to growth to such an extreme extent is not the hallmark Of wise leadership. Run for the hills.