Twitter Plans First Sale of High-Yield Debt;
In your posting you are expected to address the following questions:
Based on the most recent closing yield of US Treasury Notes, at what “spread” over Treasuries is Twitter’s high-yield bond being marketed?
What is the basis for Twitter’s current credit ratings?
What is Twitter’s stated use of proceeds from the bond?
Why do you think Twitter was raising money in December last year? Go to yahoo.finance, open Twitter’s page and click on Financials tab. Take a look at Twitter’s balance sheet. What would be your assessment of the strength of the balance sheet? Did Twitter really need money?
Discuss the “pecking order of financing choices” in context of Twitter’s capital structure decision.
How did stock market react on the news that Twitter issues unsecured debt? Compare the reaction of debt investors and equity investors. Is there any difference and why.