Johnson & Johnson Raises $3.5 Billion in Six-Part Bond Offering

Johnson & Johnson (JNJ), the AAA rated maker of health-care products from Band-Aids to Listerine, sold $3.5 billion of bonds in its first offering since 2011.

J&J, one of four U.S. nonfinancial borrowers with a top credit ranking, sold six portions of bonds maturing in three to 30 years, according to data compiled by Bloomberg. Proceeds will be used to repay existing debt, New Brunswick, New Jersey-based J&J said today in a regulatory filing.

The offering from the world’s largest maker of health-care products comes as investors have been favoring the bigger yield cushions on lower-ranked debt as the Federal Reserve considers curtailing unprecedented stimulus that’s bolstered credit markets. The Bank of America Merrill Lynch AAA U.S. Corporate Index has lost 3.8 percent this year, compared with a 6.8 percent gain for dollar-denominated speculative-grade debt.

J&J issued $400 million of 0.7 percent bonds due in three years that yield 18 basis points more than similar-maturity Treasuries; $600 million of 1.65 percent, five-year debt at a relative yield of 28 basis points; $550 million of 3.375 percent, 10-year securities with a 58 basis-point spread; $650 million of 4.375 percent, 20-year bonds paying an extra 55; and $500 million of 4.5 percent, 30-year debt at 65 basis points more than benchmarks, Bloomberg data show.

Photographer: Scott Eells/Bloomberg

Johnson & Johnson, along with Microsoft Corp., Exxon Mobil Corp. and Automatic Data Processing Inc., have the highest ratings from Moody’s and S&P. Close

Johnson & Johnson, along with Microsoft Corp., Exxon Mobil Corp. and Automatic Data... Read More

Close
Open
Photographer: Scott Eells/Bloomberg

Johnson & Johnson, along with Microsoft Corp., Exxon Mobil Corp. and Automatic Data Processing Inc., have the highest ratings from Moody’s and S&P.

The transaction also included $800 million of three-year, floating-rate notes that yield 7 basis points more than the three-month London interbank offered rate. Libor (US0003M), the rate at which banks say they can borrow from each other, was set at 0.24 percent today.

J&J, 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.

High-yield, high-risk debt is ranked below Baa3 by Moody’s Investors Service and lower than BBB- at Standard & Poor’s.

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

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.