Eli Lilly Taps High-Grade Bond Market With Rare 40-Year Paper

An Eli Lilly & Co. logo at the company's offices in Madrid, Spain, on Wednesday, April 23, 2025. Spain has risen to the top of European rankings for clinical trials, using some of the region’s most generous tax breaks and a relatively speedy regulatory process to reduce the lag from the start of a drug trial to approval. Photographer: Emilio Parra Doiztua/Bloomberg

(Bloomberg) -- Eli Lilly & Co. is tapping the US investment-grade debt market with a deal that’s expected to include a 40-year bond, a rarity in a world characterized by high borrowing costs.

The drugmaker is selling debt in as many as seven parts, with initial price discussions for the 40-year tranche at 1.05 percentage points above Treasuries, according to a person familiar with the matter. The deal is also expected to include a 30-year portion, as well as others with maturities ranging from three years to 10 years, the person said, asking not to be identified discussing private details.

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The offering comes amid a dearth of supply of long-dated corporate bonds: Just 11% of high-grade debt sold this year had a maturity of 30 years or more, down from 15% in 2024, as companies have been reticent to lock in elevated borrowing costs for long periods of time.

Eli Lilly is one of at least nine companies selling US high-grade debt on Monday, with McDonald’s Corp., Marriott International Inc. and Charter Communications Inc. among the others. Borrowers are piling in ahead of a seasonal slowdown later this month.

Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Mizuho Financial Group Inc. and Morgan Stanley are managing Eli Lilly’s sale, with proceeds earmarked for general corporate purposes. The bonds are expected to be rated Aa3 by Moody’s Ratings and A+ by S&P Global Ratings.

Issuer Profile

Debt distribution: LLY US Equity DDIS

Capital structure: LLY US Equity CAST

Related securities: LLY US Equity RELS

Ratings history: LLY US Equity CRPR

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