Issuer: Phillips Petroleum Co
Amount: $2.5 billionType of issue: Global bond Date of issue:
May17Bookrunners: JP Morgan, Merrill Lynch
At a time when corporate bond issuers are struggling to win support
from fixed-income investors, BBB-rated Phillips Petroleum showed
that the global bond markets are still open to finance big
acquisitions for companies in the right sectors, as long as they
have credible management teams and quality assets.
Phillips achieved hefty over-subscriptions on its
$1.15 billion five-year and $1.35 billion 10-year global bonds. It
attracted over $8 billion of demand, despite investors in its
outstanding long-dated bonds having recently suffered spread
widening following two notch downgrades in its credit ratings from
A-/A3 to BBB/Baa2. It increased the total deal size modestly from
the initial target of $2 billion.Prompting both the downgrades and
the latest global bond oVer was the same event: a transformational
acquisition for the 83-year-old company, which operates in four
businesses - petroleum exploration and production,...
