A number of multinational companies bought companies in other countries and financed the purchases with dollar-denominated debt.

The claim is that a number of multinational companies bought companies in other countries and financed the purchases with dollar-denominated debt, as of 2018-11-11. True: credible financial reporting or data (BIS, IMF, rating agencies, major financial press) document multiple multinational companies financing cross-border acquisitions with US dollar-denominated debt in the period before the claim. Mostly true: dollar borrowing by non-US firms for foreign purchases is documented, with only minor imprecision about scale or which firms. Mixed: dollar debt build-up is documented, but its link to cross-border acquisitions is weak or limited to one or two cases. Mostly false: the dollar borrowing was mainly for other purposes, and acquisition financing was rare. False: no such pattern existed and evidence shows the purchases were financed otherwise.

Set before the research began.

1. E1 EMEA High-Yield Bond and EMEA Leveraged Loan: Numericable's and Altice's US$21.9bn acquisition financing | IFR IFR (Thomson Reuters) · 17 November 2014

   “Second, even though it was funding a purely French acquisition, the majority of the financing at both the opco and holdco was raised in dollars to achieve the best cost of capital; it was cheaper in the end to raise in dollars and swap back to euros.”

2. E2 OVL raises USD 2.21 billion to finance Mozambique deal - Daily Excelsior Daily Excelsior (PTI report) · 10 July 2014

   “Proceeds of the bond sale, the biggest ever from Asia, will be used to repay short-term bridge loan that OVL had taken to finance acquisition of 16 per cent stake in a giant gas field off Mozambique.”

3. E3 [PDF] Dollar credit to emerging market economies - the BIS Bank for International Settlements (BIS Quarterly Review, December 2015) · December 2015

   “Firms can borrow dollars to fund productive assets held by affiliates outside the home country, ie foreign direct investment. EME firms accounted for a record 35% of all foreign direct investment in 2014 (UNCTAD (2015)).”

4. E4 Non-financial corporations from emerging market economies and capital flows | Bank for International Settlements Bank for International Settlements (BIS Quarterly Review, December 2014) · 7 December 2014

   “If the proceeds of the bond issuance are used for acquiring foreign assets, the money stays outside and there are no cross-border capital movements.”

The BIS describes emerging-market firms borrowing dollars to fund assets held by their foreign affiliates (foreign direct investment), and notes that offshore bond proceeds can be used to buy foreign assets. Neither BIS item gives a measure of how much dollar borrowing went to cross-border acquisitions (E3, E4). Trade-press reports give specific examples. Altice and Numericable raised most of the financing for a French acquisition in dollars and swapped it back to euros (E1). OVL raised USD 2.21 billion in a bond sale to repay a bridge loan that funded its stake in a Mozambique gas field (E2). Together these are consistent with the pattern described, but the evidence names only two dollar-financed acquisitions and gives no measure of how widespread the practice was.