Following a successful bond offering, which capitalized on record low interest rates to bolster Blackstone’s already strong balance sheet, rating agencies Standard & Poor’s and Fitch reaffirmed the firm’s A/A+ credit rating. This credit rating is the highest of any alternative asset manager and one of the highest of any financial institution.
The offering demonstrated a clear sign of confidence in Blackstone. The $650 million offering was substantially oversubscribed by many of the biggest and most sophisticated institutional investors in high-grade debt around the world with $4 billion in total orders. The bonds priced with an even tighter spread to Treasuries than those bonds issued in prior offerings, a particularly favorable outcome in any circumstance and particularly so in an uncertain economic environment.
The offering was $400 million of 10.5-year notes bearing a 4.75% coupon and $250 million of 30-year notes bearing a 6.25% coupon. The success of the offering reflects investors' belief in the stable earnings and longevity of Blackstone, as it is the only alternative asset manager to ever issue a 30 year bond and one of the few non-bank financial institutions to issue 10 year paper at under 5 per cent.
The money raised is for general corporate purposes, namely to continuing investing in Blackstone’s growth.