Merck Smartly Grabs The Bottom Of the Yield Curve -- Prices $2.5 Billion Of Debt, In Three Tranches

But first -- I'll note that Merck's Adam Schecter is presenting the usual slide deck -- at Noon Eastern today -- in New York, before a Morgan Stanley audience. And it's a dividend yield story. So, do click the link to tune in.

Now -- to put the debt offerings in a personal perspective, here -- getting 30 years of unsecured debt at a 3.688 percent yield is pretty sweet; just as getting five year money (also unsecured) at 1.139 percent is. . . pretty sweet. Consider (as comparators) that your 30 year mortgage, which is secured by your home (unlike Merck's borrowings), is probably around 5 percent -- at best. No, 1.1 percent is most akin to your credit card rate -- which is likely around 9.8 percent at your best. Merck can charge for five years of maturity at 1.1 percent. Like I said -- that's sweet -- and the benefit of being a "AA" rated credit. Here's the story -- per Reuters:

. . . .Merck & Co Inc on Monday sold $2.5 billion of notes in three parts, said IFR, a Thomson Reuters service.

Bank of America Merrill Lynch, Citigroup, and JP Morgan were the joint bookrunning managers for the sale.

TRANCHE 1 

AMT $1 BLN      COUPON 1.1 PCT     MATURITY    01/31/2018
TYPE NTS        ISS PRICE 99.797   FIRST PAY   07/31/2013 
MOODY'S A1      YIELD 1.139 PCT    SETTLEMENT  09/13/2012   
S&P DOUBLE-A    SPREAD 50 BPS      PAY FREQ    SEMI-ANNUAL
FITCH A-PLUS    MORE THAN TREAS    MAKE-WHOLE CALL 10 BPS
    
TRANCHE 2

AMT $1 BLN      COUPON 2.4 PCT     MATURITY    09/15/2022
TYPE NTS        ISS PRICE 99.965   FIRST PAY   03/15/2013 
MOODY'S A1      YIELD 2.404 PCT    SETTLEMENT  09/13/2012   
S&P DOUBLE-A    SPREAD 75 BPS      PAY FREQ    SEMI-ANNUAL
FITCH A-PLUS    MORE THAN TREAS    MAKE-WHOLE CALL 12.5 BPS
    
TRANCHE 3

AMT $500 MLN    COUPON 3.6 PCT     MATURITY    09/15/2042
TYPE NTS        ISS PRICE 98.411   FIRST PAY   03/15/2013 
MOODY'S A1      YIELD 3.688 PCT    SETTLEMENT  09/13/2012   
S&P DOUBLE-A    SPREAD 90 BPS      PAY FREQ    SEMI-ANNUAL
FITCH A-PLUS    MORE THAN TREAS    MAKE-WHOLE CALL 15 BPS. . . .

And, now to catch up on a bevy of assorted Merck updates, here: Merck had promising results from its new sleep candidate, its HPV vaccine has been recommended in the EU, and the legacy Merck Januvia franchise is doing remarkably well, of late. Finally, Merck will likely file an NDA with FDA in 2013 -- for approval of its CV candidate vorapaxar.

So there you have it.