Financially thriving job site ZipRecruiter is issuing its first ever junk bonds with the intention of raising $500 million in fast cash.
Though junk bonds are typically issued by struggling companies with poor credit ratings, Bloomberg reported that analysts at Moody’s believe ZipRecruiter either needs the money for an urgent acquisition or simply wants to tap the junk-bond market while rates remain unusually low.
ZipRecruiter’s announcement states only that the proceeds will be used “for general corporate purposes, which may include capital expenditures, investments and working capital.”
JPMorgan Chase & Co. will lead the sale of the notes, whose principal is due in 2030. The bonds are initially being offered at a yield in the low-5% range, Bloomberg reported, citing an anonymous source.
Like many peers in the recruiting industry, ZipRecruiter has been flying high amid labor shortages and the intense competition to find and hire candidates. The latest U.S. jobs report, covering November, showed favorable market conditions continuing with 3% of workers quitting their jobs, matching the record high set in September.
ZipRecruiter, which went public in May, posted revenue of $212.7 million for Q3 2021, along with a $22.7 million profit. The better-than-forecast result led the firm to boost its revenue forecast for the year from $658 million to $727 million. That would represent 74% year-on-year growth.