Monsanto Plans $500 Million Bond Sale to Repay Maturing Debt
By Charles Mead – Jul 9, 2012 3:46 PM GMT+0100
Monsanto Co. (MON), the world’s biggest seed company, plans to sell $500 million of debt in a two-part offering of 10- and 30-year bonds to repay maturing obligations.
The 10-year notes may yield about 75 basis points more than similar-maturity Treasuries and the 30-year bonds may have a 105 basis-point spread, according to a person familiar with the offering who asked not to be identified because terms aren’t set. Proceeds from the sale, which would be Monsanto’s largest since 2008, will be used to repay $486 million of 7.375 percent notes due August 15, the St. Louis-based company said today in a regulatory filing.
The new senior notes may be rated A1 by Moody’s Investors Service, its fifth-highest level, and an equivalent A+ by Standard & Poor’s, the person said. Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co., Royal Bank of Scotland Group Plc and Wells Fargo & Co. are managing the offering, according to the filing.
Monsanto, which has $2.05 billion of bonds outstanding, sold a combined total of $550 million of 10- and 30-year securities in April 2008, according to data compiled by Bloomberg.