Teva raises $15 billion through bond sale
- Israeli drugmaker Teva Pharmaceutical sold $15 billion worth of corporate bonds Monday to help finance its $40.5 billion purchase of Allergan's generics portfolio, which is expected to be approved by U.S. regulators shortly.
- Teva offered six tranches of fixed-rate senior notes, with yields ranging from 1.4% for bonds maturing in 2018 to 4.1% for 30-year notes. Teva sold $3.5 billion of ten-year bonds with a yield of 3.15%.
- The bond sale is one of the largest corporate offerings this year, according to the Financial Times. With yields low across markets, investment-grade corporate debt with a higher return is particularly attractive.
“The strength of the demand, which was multiple times the size of the offering, and the attractive prices, are a testament to Teva's financial strength and strong reputation with investors,” said Eyal Desheh, chief financial office at Teva.
Teva is on the verge of becoming the world's largest generics drugmaker if the U.S. Federal Trade Commission (FTC) clears the acquisition of Allergan's generics unit as expected.
Almost exactly a year ago, Teva announced it would buy the generic drugs from Allergan for $40.5 billion. The European Commission gave the deal a green light in March but the FTC has been slow to give its approval.
Teva and Allergan have sold off over 60 generics drugs to a number of companies in an effort to alleviate anti-trust concerns. The companies recently extended the deadline to complete the deal to October 26 as they await the decision from the FTC.
Teva chief executive Erez Vigodan told investors on a conference call last week he expected the deal to close "at any time now."
The bond sale and recently released revenue projections by Teva are indicative of the confidence Teva has in winning final approval.
Teva's $15 billion bond offering is the third-largest deal this year, coming behind sales by Anheuser-Busch Inbev and Dell, according to the Financial Times.