Johnson & Johnson issues $5 billion in new notes

Today, Johnson & Johnson (NYSE:JNJ) announced the successful issuance of $5 billion in aggregate principal amount of new notes. This financial move, completed on February 20, 2025, was part of a broader public offering under the company’s existing shelf registration statement.

The offering includes a series of notes with varying maturity dates and interest rates: $750 million of 4.500% Notes due 2027, $750 million of 4.550% Notes due 2028, $1 billion of 4.700% Notes due 2030, $1.25 billion of 4.850% Notes due 2032, and $1.25 billion of 5.000% Notes due 2035.

The pharmaceutical giant entered into an underwriting agreement with Citigroup (NYSE:C) Global Markets Inc., BofA Securities, Inc., and J.P. Morgan Securities LLC, acting as representatives of the underwriters for the issuance. The terms of the agreement and the specifics of the notes are detailed in the exhibits attached to the 8-K filing with the Securities and Exchange Commission (SEC).

Johnson & Johnson’s decision to issue new debt comes as part of its capital management strategy. The funds raised may be used for a variety of corporate purposes, which could include refinancing existing debt, funding ongoing operations, or investing in future growth opportunities.

The notes were offered and sold to the underwriters on February 18, 2025, just two days prior to the completion of the offering. Legal opinions regarding the issuance were provided by Weil, Gotshal & Manges LLP and Troutman Pepper Locke LLP, as indicated in the exhibits of the SEC filing.

Investors and market watchers often view such financial activities as indicators of a company’s financial health and strategic direction. Johnson & Johnson’s latest move could be interpreted as taking advantage of the current market conditions to strengthen its balance sheet.

This report is based on a press release statement.

In other recent news, Johnson & Johnson reported fourth-quarter 2024 sales of $22.5 billion and earnings per share of $2.04, meeting or slightly exceeding analysts’ expectations. Guggenheim maintained a Neutral rating on the company but raised the stock’s price target from $162 to $166, citing strong performance in its Innovative Medicine segment. Meanwhile, the company has announced plans to acquire Intra-Cellular Therapies (NASDAQ:ITCI) Inc. for approximately $14.6 billion, a move expected to increase its adjusted leverage temporarily. S&P Global Ratings assigned an ’AAA’ rating to Johnson & Johnson’s new senior unsecured notes, though they were placed on CreditWatch Negative due to the acquisition’s impact on leverage.

Additionally, Johnson & Johnson is planning to sell its stroke care business, Cerenovus, as part of its medical technology division restructuring, with an expected valuation of over $1 billion. The company has also resumed the limited U.S. release of its VARIPULSE™ devices following a thorough investigation that confirmed the devices’ proper functioning. In the pharmaceutical sector, Johnson & Johnson shared promising data on nipocalimab, an investigational drug with potential applications in treating diseases driven by immunoglobulin G antibodies. Nipocalimab has received key designations from the FDA and EMA, highlighting its potential to address unmet medical needs.

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