CFOs are favouring equity over debt as corporate finance landscape shifts, banks hike interest rates

CFOs are favouring equity over debt as corporate finance landscape shifts, banks hike interest rates

Bloomberg reports that for the first time in over two decades, it's cheaper for US blue-chip companies to sell shares than to borrow.
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In a notable shift, CFOs like Bryan Riggsbee of Myriad Genetics are opting for equity over debt as central banks hike interest rates. Bloomberg reports that for the first time in over two decades, it's cheaper for US blue-chip companies to sell shares than to borrow. This move, coined as "de-equitization" by analyst Robert Buckland, could reshape corporate finance, reducing reliance on debt and private equity. While potential short-term valuation impacts are acknowledged, the trend may foster greater public ownership and diversity in the market. Analysts anticipate a potential surge in equity issuance, signalling a significant market shift.

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By Sujata Rao-Coverley and Bailey Lipschultz

For the better part of a decade, Bryan Riggsbee did what countless other finance chiefs, both in the US and beyond, had done when their companies needed money — he borrowed it.

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