February 17, 2012 / 10:04 PM / 6 years ago

Fidelity parent plans $250 million debt offering

BOSTON (Reuters) - The parent of Fidelity Investments, FMR LLC, plans to raise $250 million through a debt offering, according to U.S. regulatory filings.

The company was not immediately available for comment. A filing with the U.S. Securities and Exchange Commission did not say how the proceeds from the debt sale would be used.

Over the past year, some credit analysts have questioned the debt load of Fidelity amid some weakness in its mutual fund business. Analysts at Moody’s Investors Service, for example, have noted the company’s relatively high level of leverage and a significant call on future resources from subordinated debt and other long-term obligations.

In April, Moody’s affirmed FMR’s “A2” rating on senior unsecured debt, but changed the rating outlook to “negative” from “stable,” reflecting some erosion of the company’s market share.

Fidelity is privately held, with the majority of its voting stock owned by some senior management executives, with members of the family of Chairman Edward C. Johnson III holding the most influence.

Boston-based Fidelity is one of the world’s largest asset managers, with about $1.3 trillion in mutual fund assets under management. It is probably best-known for its large family of mutual funds, including the Magellan and Contrafund.

Reporting By Tim McLaughlin, editing by Matthew Lewis

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