(Bloomberg) – Diamondback Energy Inc. is tapping the U.S. investment-grade market with a bond offering to partly help fund its $26 billion takeover of Endeavor Energy Resources LP, joining other blue-chip companies capitalizing on robust investor demand to bring acquisition-related debt deals.

Diamondback is selling the bonds in as many as five parts, according to a person with knowledge of the matter. The longest portion of the offering, a 40-year security, may yield 170 basis points above Treasuries, said the person, who asked not to be identified as the details are private.

The total target size of the issuance is said to be around $5 billion, according to separate people with knowledge of the matter. A representative for Diamondback didn’t immediately respond to a request for comment.

Proceeds from the offering will be used for general corporate purposes, including paying a portion of the cash consideration for the Endeavor merger and repaying certain debt of Endeavor if the merger closes, added the person. Diamondback last month inked a $1.5 billion term loan agreement to finance the acquisition.

Diamondback in February agreed to buy fellow Texas oil-and-gas producer Endeavor in a $26 billion cash-and-stock deal to create the largest operator focused on the prolific Permian basin. Diamondback will fund the deal with 117.3 million shares and $8 billion in cash, the two Midland, Texas-based companies said in a statement on Feb. 12.

Bank of America Corp., Citigroup Inc. and Toronto-Dominion Bank are managing the bond sale, said the person. Representatives for the three banks didn’t immediately respond to requests for comment.

Multi-billion dollar bond offerings to fund mergers and acquisitions are helping fuel a $559.2 borrowing binge in the high-grade market this year through Monday, a trend that Bloomberg Intelligence analyst Robert Schiffman said he expects will boost debt sales through the rest of 2024. Home Depot Inc. told investors last month it expects to take on $12.5 billion of debt to help fund its planned purchase of building-products distributor SRS Distribution Inc.

Diamondback’s debt outstanding will double to around $13 billion if it closes the takeover, CreditSights analysts including Charles Johnston wrote in a note Tuesday. Still, cash flow generated throughout the year will limit the leverage impact, with pro forma leverage expected to be at around 1.1 times by the end of the year, they added.

“In the medium term, the CFO would like the net debt to be in the $6-$8 billion range, with material amounts of cash on the balance sheet for countercyclical share repurchases,” wrote the analysts.