Why S&P Global Stock Topped the Market Today
Key Points
It aims to spin off its automotive data unit, Global Mobility.
Its investors will be offered shares in the separated company.
Storied financial data and analysis company S&P Global (NYSE: SPGI) was a standout on the exchange as the trading week kicked off. Its shares ended the day with a pleasing gain of over 3.5%, while the benchmark S&P 500 index essentially traded flat. Investors were cheered by fresh financing news from the company.
Hitting the road
That morning, S&P Global announced that its Mobility Global holding company is issuing $2 billion in senior notes. These will have varying maturities; the earliest will come due in 2029, while later ones are to mature in 2031 and 2036.
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This is being done in advance of the planned spinoff of the parent company's automotive data unit, Global Mobility, to existing shareholders. This business includes the popular Carfax information service. S&P Global added that Mobility Global has also entered into a $500 million senior unsecured revolving credit facility.
In its words, the proceeds of the notes issue to "finance a cash payment to S&P Global as consideration for the transfer of certain assets, liabilities and entities to the issuer, and the issuer will use any remaining proceeds to fund estimated fees and expenses and for general corporate purposes."
A well-financed spinoff
It's heartening that S&P Global (and the future, independent Global Mobility) has access to such considerable levels of debt financing. Even for large and prominent companies, $2 billion can provide significant financial muscle for many activities. I think investors were right to be bullish on this news.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends S&P Global. The Motley Fool has a disclosure policy.