Maybe the federal government is finally getting results with its maneuverings?
Well, there are definitely signs that it's getting somewhat easier for companies to raise debt capital – at least for those that have rock-solid balance sheets, according to the Wall Street Journal.
Take Cisco (NASDAQ: CSCO). On Monday, the company pulled off a bond issue for a cool $4 billion.
Hey, at some point, investors need to make money, right? So why not do some deals with sterling companies like Cisco?
Part of the Cisco bonds carry a maturity of ten years. The yield? It's an attractive 4.979%. Also, another portion of the bonds have a maturity of 30 years and a yield of 5.916%.
For Cisco, it's a good bet that the company will leverage the capital into some dealmaking. With fairly low valuations across the tech sector, there should be some prime transactions. And Cisco hasn't been shy about its ambitions.
What's more, the Cisco bond offering may be just the beginning of other debt offerings in corporate America. And while the credit will go mostly to top-quality companies, the fact remains that we are seeing signs of risk-taking – which is critical. Eventually, as companies put this money to work, it should lead to more activity and further thawing of the credit markets.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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