The offering includes up to five separate pieces, called tranches, with maturities running from three to ten years. Bank of America and Wells Fargo are running the sale on every piece.
For the longest bond, investors are being offered a yield of about 1.15 percentage points above what the U.S. government pays on similar Treasuries. That spread is the extra return investors get for taking on corporate risk instead of government risk.
The wider the spread, the more the market wants to be paid for lending to a company. The total raised could creep higher if investor demand is strong, according to people familiar with the deal.
Investment-grade bonds are the safer end of the corporate debt market. Demand for them tends to stay steady even when other corners of finance wobble, which is why ICE can raise billions in a single day.
This sale comes two weeks after ICE announced it would buy MarketAxess for $6 billion. The deal hands the NYSE parent a leading platform for trading bonds, a business that has been slower to move online than stocks.
Bond trading has long run on phone calls and dealer relationships, with buyers and sellers matched one at a time. MarketAxess built an electronic marketplace for that, and ICE wants in.
Fixed-income trading generates steady fees, and the market is enormous. Stocks get the headlines, but bonds are a much bigger market by dollar volume.
Get the free Always Be Buying eBook and learn the simple system for building wealth on any income
ICE already had a bridge loan from Bank of America for up to $6.25 billion to cover the purchase. That kind of short-term financing is common while companies line up longer-term debt.
The bond offering replaces the temporary loan with money that stretches out over a decade.
ICE is not alone in the market. Martin Marietta is selling bonds in five parts to help fund its $13.5 billion acquisition of Lhoist North America.
Ferguson Enterprises is marketing a two-tranche bond deal; its agreement to acquire FWI Holdings was announced about a month ago.
Tuesday has 10 high-grade bond offerings in total, following a Monday when 19 companies issued debt. That was the most in seven months.
Companies do not borrow billions for deals unless they feel good about the economy and their own prospects. The volume of deals this week suggests the mood is confident.
For everyday investors, the yield spread is the number to watch. ICE paying 1.15 percentage points above Treasuries for ten-year money tells you what the market thinks of the risk.
It is also a reminder that corporate bonds can pay more than government ones for a reason. The extra yield is compensation for the chance that a company runs into trouble.
The MarketAxess deal, if it closes, could reshape how bond trading works. More electronic trading tends to mean tighter prices and lower costs over time, which is good news for anyone holding bond funds or ETFs.
It could also mean more competition in a corner of finance that has been slow to change. That kind of shift does not happen overnight.
But the bond market is clearly open for business. The companies lining up to borrow are betting that growth is worth the cost, and that is a signal worth paying attention to.
For investors who hold bond funds, the message is straightforward. When companies like ICE borrow at reasonable rates, it is a sign that credit is flowing and the economy is on solid footing.
Download the free Always Be Buying eBook and start putting your money to work today
