JT to sell bonds to pay for Gallaher

Japan Tobacco Inc. said Monday it plans to sell about 150 billion yen of bonds to repay debt for the purchase of Gallaher Group PLC.

Tokyo-based JT hired Daiwa Securities SMBC Co. and Nomura Holdings Inc. to handle the sale, said JT spokeswoman Yukiko Seto.

JT, the world's third-largest traded cigarette maker, is aiming to price the bonds this month, Seto said.

JT completed its purchase of Gallaher, the maker of Benson & Hedges cigarettes in Europe, in April for £7.5 billion ($15 billion) in the biggest international takeover by a Japanese company. JT borrowed 450 billion yen from Mizuho Bank Ltd., part of Mizuho Financial Group Inc., Seto said.

It also borrowed £1.9 billion from a group of banks led by Merrill Lynch & Co. The borrowing was refinanced June 26 using cash and loans from banks including Citigroup Inc.

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