Johnson & Johnson, the AAA rated maker of health-care products, is planning to sell $3.25 billion of debt in its first offering in more than two years.
The company, one of four U.S. nonfinancial borrowers with a top credit ranking, may sell six portions of bonds maturing in three to 30 years as soon as today, according to a person with knowledge of the transaction. The deal, its first since May 2011, will be used to repay existing debt.
The world's largest maker of health-care products may sell $400 million of bonds maturing in three years to yield 18 basis points more than similar-maturity Treasuries, $600 million of five-year debt at a relative yield of 28 basis points, $550 million of 10-year securities at a 58 basis-point spread, $650 million of 20-year bonds at 55 basis points, and $500 million of 30-year debt at 65 basis points, said the person, who asked not to be identified because terms aren't set. It may also issue $550 million of three-year, floating-rate notes to yield 7 basis points more than the three-month London interbank offered rate.
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The debt is expected to be rated Aaa, the highest level of investment grade, by Moody's Investors Service, and an equivalent AAA at Standard & Poor's, the person said. Bank of America Corp., Goldman Sachs Group Inc., and JPMorgan Chase & Co. are managing the offering for the New Brunswick, New Jersey-based company.
Johnson & Johnson, along with Microsoft Corp., Exxon Mobil Corp., and Automatic Data Processing Inc., have the highest ratings from Moody's and S&P. Microsoft raised $2.67 billion in April, including $1 billion of 10-year notes that yielded 3.49 percent on Nov. 25, according to data compiled by Bloomberg.
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