Originally published on Wed September 11, 2013 10:22 am
The number is stunning:
"Verizon Communications could be taking on nearly $50 billion in new debt in a massive bond sale to help the telecom giant pay for its $130 billion acquisition of Verizon Wireless shares," writes USA Today.
Hearing about today's sale and its potential record-breaking size set us in search of stories about what it means.
The bottom line seems to be that it's another sign the U.S. economy is picking up steam. Why? Because interest rates go up when times are good and borrowing increases. Verizon seems to be cashing in on some of the last of the low rates.
Forbes, for instance, says that Verizon's huge sale is a sign that the "global credit boom" is over. It's "something like the last big tech IPO of the Internet bubble." Or, in other words, with interest rates starting to rise and the Federal Reserve expected to soon stop trying to give the economy a boost by buying bonds, Verizon is rushing to take advantage of low borrowing rates.
"The deal's expansion shows the eagerness of some large companies to sell debt ahead of a meeting next week by the Federal Reserve. Some investors expect the central bank to reduce its monetary stimulus in a shift that would likely lead to higher interest rates."
Copyright 2013 NPR. To see more, visit http://www.npr.org/.