Twitter Boosts Bond, Ties for Record-Low Yield Amid Buyer Frenzy

(Bloomberg) -- Twitter Inc. managed to borrow at some of the lowest costs ever in the junk-bond market as investors clamored for a piece of the technology company’s debut sale.

The size of the offering was increased to $700 million from a planned $600 million after Twitter received more than $6 billion in orders for its debt, according to people with knowledge of the matter, who asked not to be identified because the information is private. It ultimately sold the notes at a yield of 3.875%, matching the yield Popeyes parent company Restaurant Brands International Inc. paid to borrow in September. The coupon is the lowest for securities maturing in eight years or more in the U.S. high-yield market, according to data compiled by Bloomberg.

The strong demand for the bonds shows how eager investors are to get their hands on higher paying securities, especially ones with BB tier ratings that carry less risk than lower-rated junk bonds. Double B rated notes have returned 14.1% this year through Wednesday, compared with the broader high-yield market’s 12.1% gain. Large cash-flow positive technology companies like Twitter are also a relative rarity in a market that’s become accustomed to deals from cash-burners like Netflix Inc. and

Twitter and Restaurant Brands may have each other to thank for some of their junk bond market success. The fast-food operator brought its deal just weeks after Popeyes sold out of its famous chicken sandwich. Crowds descended onto stores eager to try a menu item that became a sensation on the microblogging site.

--With assistance from Gowri Gurumurthy.

To contact the reporter on this story: Claire Boston in New York at cboston6@bloomberg.net

To contact the editors responsible for this story: Nikolaj Gammeltoft at ngammeltoft@bloomberg.net, Christopher DeReza, Allan Lopez

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