Diamondback Energy Inc. (Nasdaq: FANG) is borrowing $5.5 billion in the U.S. investment-grade market to partly help fund its $26 billion takeover of Endeavor Energy Resources LP, joining other blue-chip companies capitalizing on robust investor demand to bring acquisition-related debt deals.
Diamondback is selling the bonds in five parts, according to Bloomberg News. The longest portion of the offering, a 40-year security, will yield 142 basis points above Treasuries, after initial discussions of around 170 basis points, Bloomberg reported. Proceeds from the offering will be used for general corporate purposes, including paying a portion of the cash consideration for the Endeavor merger and repaying certain debt of Endeavor if the merger closes.