Thermo Fisher Scientific Inc. (TMO), the maker of medical-laboratory equipment acquiring Life Technologies Corp. (LIFE) for $13.6 billion, is offering $3.2 billion of bonds in four parts to help fund the purchase.
The company may sell equal portions of $900 million each of three-year notes to yield 75 basis points more than similar-maturity Treasuries and five-year bonds to pay 100 basis points more than benchmarks, $1 billion of debt due in 10 years at a spread of 135 and $400 million of 30-year securities at 140, according to a person with knowledge of the transaction.
The bonds may be rated Baa3, the lowest level of investment grade, by Moody’s Investors Service. Fitch Ratings cut its grade today one level to BBB, one level above Moody’s, because of the $10.8 billion of additional debt from the Life Technologies transaction.
The new securities will be redeemed at 101 cents on the dollar if Thermo doesn’t close the acquisition by July 14, the company said in a filing today. Life Technologies, based in Carlsbad, California, makes laboratory equipment that helps to map DNA, information used to diagnose disease, identify risks of certain conditions or more efficiently target medicines.
It last issued debt in August 2012, raising $1.3 billion in two parts, according to data compiled by Bloomberg.
Barclays Plc, JPMorgan Chase & Co., and Royal Bank of Scotland Group Plc are managing the offering for the Waltham, Massachusetts-based company, said the person, who asked not to be identified because terms aren’t set.
To contact the editor responsible for this story: Alan Goldstein at email@example.com