Bloomberg News

Monsanto Raises $500 Million to Repay Obligations Due in August

July 09, 2012

Monsanto Co. (MON:US), the world’s biggest seed company, sold equal $250 million portions of 10- and 30- year bonds at its record low coupons to repay maturing obligations.

The company issued the 2.2 percent, 10-year notes to yield 70 basis points more than similar-maturity Treasuries and the 3.6 percent, 30-year bonds with a 100 basis-point spread, according to data compiled by Bloomberg. Proceeds from the sale, Monsanto’s largest since 2008, will be used to repay $486 million of 7.375 percent notes due August 15, the St. Louis- based company said today in a regulatory filing. The coupon on the 10-year bond is the company’s lowest, beating its 2.75 percent, five-year debt sold in April 2011, Bloomberg data show.

“Stable earnings, driven by elevated corn and soybean prices, should support a tight spread for the company in this volatile bond market,” Min Tang-Varner, an analyst at Chicago- based Morningstar Inc., wrote today in a research note. “Monsanto’s business profile and underlying sales should be robust in the current economic environment.”

The new 30-year senior notes are expected to be rated A1 by Moody’s Investors Service, its fifth-highest level, Bloomberg data show. Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co., Royal Bank of Scotland Group Plc and Wells Fargo & Co. managed the offering, according to the filing.

Monsanto, which has $2.05 billion of bonds outstanding, sold a combined total of $550 million of 10- and 30-year securities in April 2008, according to data compiled by Bloomberg.

To contact the reporter on this story: Charles Mead in New York at cmead11@bloomberg.net

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


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