Monsanto Raises $500 Million to Repay Obligations Due in August

Monsanto Co. (MON), the world’s biggest seed company, sold equal $250 million portions of 10- and 30- year bonds at its record low coupons to repay maturing obligations.

The company issued the 2.2 percent, 10-year notes to yield 70 basis points more than similar-maturity Treasuries and the 3.6 percent, 30-year bonds with a 100 basis-point spread, according to data compiled by Bloomberg. Proceeds from the sale, 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 coupon on the 10-year bond is the company’s lowest, beating its 2.75 percent, five-year debt sold in April 2011, Bloomberg data show.

“Stable earnings, driven by elevated corn and soybean prices, should support a tight spread for the company in this volatile bond market,” Min Tang-Varner, an analyst at Chicago- based Morningstar Inc., wrote today in a research note. “Monsanto’s business profile and underlying sales should be robust in the current economic environment.”

The new 30-year senior notes are expected to be rated A1 by Moody’s Investors Service, its fifth-highest level, Bloomberg data show. Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co., Royal Bank of Scotland Group Plc and Wells Fargo & Co. managed 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.

To contact the reporter on this story: Charles Mead in New York at cmead11@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.