The digital payments company's 10-year bonds, with an aggregate principal amount of $1 billion, were priced at 160 basis points over the Treasury's under the deal to yield about 2.3%, it said. This is the same amount as the cut PayPal takes from its customers in the United States.
Another $1 billion each has been raised in 3-year bonds with pricing aimed at a yield of $1.35%, 5-year bonds with a yield of $1.65%, and 30-year bonds with a yield of 3.25%.
The offering is expected to close May 18, PayPal said.
The amount raised from the bonds will be used to pay down a $3 billion loan in a five-year revolving credit line and for other general corporate purposes, the California-based company said.
According to MarketWatch, which first reported the news, S&P Global Ratings has deemed the bond offering to be “leverage neutral” for PayPal, which is “showing a much lower impact from COVID-19 than its peers."
Nevertheless, analysts noted a regulatory write-off, 20% revenue growth in April, and May 1 being its largest transaction day in history as signs of its growth during and beyond the pandemic.
PayPal shares closed nearly 0.7% lower at $143.96 on Monday. The shares dipped 0.2% in the after-hours session at $143.66.