(Bloomberg) – Johnson & Johnson raised $ 7.5 billion in bond market to help buy Momenta Pharmaceuticals Inc. to finance, and added to a week that has seen a resumption in funding for acquisitions.
The drugmaker was the latest in a string of companies to seek funding for mergers and acquisitions, bringing even more supply to a high class that has set a new record for the month of August. Intercontinental Exchange Inc., Roper Technologies Inc. and a unit of KKR & Co. all brought band sales the past few days to fund M&A.
J&J sold the debt in six installments with the longest part, a 40-year security, giving 110 basis points over treasuries, after first discussing over 125 basis points, according to a person with knowledge of the case, who did not ask to identify if the details are private.
The company in New Brunswick, New Jersey, is seeking to fund a $ 6.5 billion acquisition – the pharmaceutical industry’s largest this year – that will build up its repertoire of autoimmune diseases. The Momenta deal is the latest sign that drug companies are looking for ways to bully themselves, as the coronavirus pandemic increases other companies.
The tire sale represents the first time J & J has been on the market in almost three years. As one of the last companies to stand with a perfect AAA credit rating, the offer was rival record-low returns set in recent transactions by Google parent Alphabet Inc. and Visa Inc.
While J&J will have to pay the debt, higher levies will hurt the flexibility to handle potential talc and opioid-related compensation costs, according to Moody’s Investors Service. S&P Global Ratings said that J & J’s adjusted debt to a measure of revenue is already at a 15-year high.
JPMorgan Chase & Co. and Bank of America Corp. managed the tire sales, the person said.
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