Johnson & Johnson (NYSE:JNJ) took advantage of its unique post as one of the two best credit risks in the corporate world (along with Microsoft) to cheaply borrow $7.5B for its acquisition of Momenta Pharmaceuticals.

The AAA-rated JNJ borrowed the funds in six tranches at historically significant yields: $1B in 0.55% 2025 notes; $1.5B in 0.95% 2027 notes; $1.75B in 1.3% 2030 notes; $1B in 2.1% 2040 notes; $1B in 2.25% 2050 notes; and $1.25B in 2.45% 2060 notes.

The funds will cover its $6.5B acquisition of Momenta with the remainder going to general purposes.

And Moody’s has given the new debt a AAA rating but a negative outlook, as it expects the company’s other businesses may not keep up with mid- to high-single digit growth in pharmaceuticals.

At last report J&J had $25.06B in long-term debt, with cash and equivalents standing at $11.17B.


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