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Salesforce Plans $50B Buyback, Debt Sale
11 Mar
Summary
- Salesforce announced a $50 billion stock buyback program.
- The company plans to sell up to $25 billion in debt.
- A dividend increase of 5.8% was also announced.
Salesforce Inc. is set to execute its largest-ever debt sale, planning to raise as much as $25 billion in notes. This move is intended to help fund a substantial $50 billion stock buyback program.
The company has engaged major financial institutions including JPMorgan Chase & Co. and Bank of America Corp. to arrange fixed-income investor calls for the potential bond offering, which could occur as soon as this week.
This significant debt-funded buyback represents a material shift in Salesforce's financial policy, with an increased tolerance for debt in its capital structure, as noted by Moody's Ratings. The agency downgraded Salesforce's rating by one notch to A2, while S&P Global Ratings lowered its outlook to negative.
In addition to the buyback, Salesforce announced a 5.8% dividend increase and a better-than-expected sales forecast on February 26. This marks the company's return to the US bond market since 2021, when it raised $8 billion to finance the Slack acquisition.
