When Fidelity Investments and Fidelity Capital invested in a $500M bond deal, investors received a sweetheart deal

By Michael DeStefano | 02.12.18 04:06:11Capital investment is a key pillar of Fidelity’s portfolio.

The firm’s $500 million deal with Fidelity Investment Management (FIM) on Thursday included $500 billion in bonds that will be issued by the bank over the next 20 years, including an $800 billion, 15-year bond offering that is backed by a combination of FIM’s cash and short-term fixed income portfolio.

The company’s chief investment officer, Scott Sivak, said the bond purchase was “a great first step in a new chapter in Fidelity investing,” as he said the bank was “not only a major investor in FIM but also one of the world’s most diverse, high-quality institutional investors.”

The bond purchase, which Sivack called a “bond buy-back,” also comes on the heels of a $400 million cash deal with Goldman Sachs, as well as a $100 million cash offer from Bank of America Merrill Lynch and a $50 million cash loan from JPMorgan Chase.