Monsanto Raises $4.5 Billion in Its Biggest Bond Offering

Monsanto Co. (MON), the world’s largest seed company, sold $4.5 billion of notes in its biggest bond sale ever to help fund share repurchases.

The seven-part offering included $1 billion of 4.4 percent, 30-year bonds that yielded 110 basis points more than similar-maturity Treasuries, according to data compiled by Bloomberg.

The seed producer plans to use the proceeds of the bond issue along with as much as $1.2 billion of commercial paper and available cash to finance accelerated stock repurchases, according to a regulatory filing today. Monsanto announced a $10 billion stock buyback plan and an intention to repurchase $6 billion of shares on an accelerated basis after ending preliminary talks about a takeover of Syngenta AG that would have cut its tax bill.

Monsanto also issued $750 million of 4.7 percent, 50-year debentures that yielded 140 basis points more than benchmarks, Bloomberg data show. That’s the largest dollar-denominated corporate bond of this maturity sold since May 2008, when Liberty Mutual Group Inc. sold $1.25 billion of 50-year securities, the data show.

The offering was Monsanto’s first since a three-part, $1 billion bond issue in November, Bloomberg data show. That sale was the company’s largest at the time.

Standard & Poor’s cut the St. Louis-based company’s rating yesterday to BBB+ from A+. Moody’s Investors Service lowered Monsanto’s grade to A3 from A1.

“Monsanto’s new financial targets represent a substantial departure from its past practice and will significantly weaken credit metrics by the end of fiscal 2015,” John Rogers, senior vice president at Moody’s, said in a statement.

The offering included $750 million of 3.4 percent, 10-year notes with a spread of 85 basis points, Bloomberg data show. The company also issued $500 million each of three-, five-, seven-, and 20-year notes. A basis point is 0.01 percentage point.

To contact the reporter on this story: Adam Janofsky in New York at

To contact the editors responsible for this story: Shannon D. Harrington at John Parry, Mitchell Martin

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.