Medtronic Inc. (MDT:US), the world’s biggest maker of heart-rhythm devices, sold $3 billion of bonds in a three-part offering, its first sale in a year.
The company’s $1 billion of 1.375 percent, five-year securities yield 63 basis points more than similar-maturity Treasuries, its $1.25 billion of 2.75 percent, 10-year notes pay a relative yield of 88 basis points and $750 million of 4 percent, 30-year debentures have a spread of 98, according to data compiled by Bloomberg.
The bonds are graded A2 by Moody’s Investors Service, the ratings company said today in a statement.
Proceeds will be used for working capital and general corporate purposes, which may include debt repayment, the Minneapolis-based company said today in a regulatory filing. The company had $11.4 billion of short-term and long-term obligations outstanding on Jan. 25, including $1.6 billion of commercial paper.
Medtronic last sold debt in March 2012 in an offering that included $675 million of 3.125 percent, 10-year debentures to yield 90 basis points more than benchmarks, Bloomberg data show. The bonds traded at 104.1 cents on the dollar to yield 2.61 percent on March 15, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
Moody’s cut its rating on Medtronic’s senior unsecured long-term rating to A2 from A1 last week, according to a March 14 report.
“We believe it is likely that Medtronic’s credit metrics will weaken further as the company adds debt to help fund shareholder initiatives and U.S. acquisitions,” Diana Lee, an analyst at Moody’s, wrote in the report.
Barclays Plc, Deutsche Bank AG, Goldman Sachs Group Inc. and JPMorgan Chase & Co. managed the offering, Bloomberg data show.
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