Vylor Offers High-Grade Debt in Market’s Latest Pre-Spinoff Deal

Vylor Inc. is offering investment-grade bonds that will help finance a payout to parent Corteva Inc. as a spinoff of the seed company nears.

The debt sale involves five- and 10-year notes, according to a person familiar with the matter. Initial price talk for the longer-tenored note is a spread of about 1.35 percentage points above Treasuries, the person added, asking not to be identified as they’re not authorized to speak publicly.

Proceeds would go toward a distribution to a fellow Corteva unit, EIDP Inc., the person said. The payment size has yet to be disclosed.

The offering, managed by Bank of America Corp., JPMorgan Chase & Co. and Morgan Stanley, is the latest in the US high-grade bond sale this year by a pending spinoff to send cash to its parent. Honeywell Aerospace Inc. and FedEx Freight Holding Co. completed multibillion-dollar note deals ahead of them becoming public companies.

Corteva, formed after the 2017 merger of Dow Chemical and DuPont, is among the world’s largest suppliers of genetically modified corn and soybean seeds, as well as chemicals used to protect crops from everything from weeds to insects.

Profits at Vylor, the seed business being spun off, have grown faster than those from pesticides in recent years. The separation is expected to be completed around Oct. 1.

Meanwhile, Corteva said Thursday that $1.42 billion of EIDP notes were tendered by Wednesday’s initial deadline as part of an exchange offer made earlier this month. The bonds will be swapped for new Vylor notes.