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Baxter Sells $3.5 Billion of Bonds in Five Parts for Gambro Deal

Baxter International Inc. (BAX), the world’s second-largest maker of dialysis products, issued $3.5 billion of debt in five parts to help fund its 18.3 billion kronor ($2.8 billion) acquisition of Gambro AB.

The company’s $500 million of 0.95 percent, three-year notes yield 50 basis points more than similar-maturity Treasuries, $750 million of 1.85 percent, five-year debt pay a relative yield of 80 basis points, $1.25 billion of 3.2 percent, 10-year securities have a 110 basis-point spread and $500 million of 4.5 percent, 30-year bonds pay 122, according to data compiled by Bloomberg. The company also sold $500 million of 18-month, floating-rate notes to yield 17 basis points more than the three-month London interbank offered rate.

About $3 billion of proceeds from the offering will be used for the Gambro deal, with the remainder going toward general corporate purposes including the repayment of commercial paper, the Deerfield, Illinois-based company said today in a regulatory filing.

Baxter agreed to buy Lund, Sweden-based Gambro to expand its kidney-equipment business, according to a Dec. 4 statement. Baxter, which also makes blood products and intravenous drugs, trails Bad Homburg, Germany-based Fresenius Medical Care AG in kidney-dialysis products. Gambro ranks third.

The company last sold debt in August, raising $1 billion in two parts including $700 million of 2.4 percent, 10-year debentures to yield 80 basis points more than similar-maturity Treasuries, Bloomberg data show. The bonds traded at 96.6 cents on the dollar to yield 2.82 percent on May 23, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. managed today’s offering, Bloomberg data show. The bonds, are rated A3 by Moody’s Investors Service, the ratings company said today in a statement.

To contact the reporter on this story: Sarika Gangar in New York at sgangar@bloomberg.net

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

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