Anticipation of $20bn Microsoft bond to finance LinkedIn deal drives up US Treasury yields
US Treasury yields rose today in anticipation of a $19.75bn (£14.93bn) bond offering from Microsoft to finance its takeover of LinkedIn.
The tech giant is expected to imminently launch the seven-tranche US dollar bond.
Orders for the bond have reached more than $30bn, while 30-year yields hit a session high today of 2.244 per cent, Reuters reported. Yields hit a more than two-week low of 2.177 per cent on Friday.
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“The competition from the corporate sector is weighing on Treasuries,” said Kim Rupert, managing director of global fixed income at Action Economics in San Francisco.
In June, Microsoft surprised the tech world with the announcement that it was set to buy LinkedIn for $26.2bn.
The company said it will pay $196 per share in an all-cash deal for the professional networking site, a near 50 per cent premium on LinkedIn’s share price at the time of the announcement.
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LinkedIn, which is still loss making, will continue to be run as a separate company under current chief executive Jeff Weiner. The deal ties into Microsoft’s greater focus on the corporate rather than consumer world.
Microsoft said at the time it would issue new debt to fund the deal, which it expects to close by the end of the year.