Teva raises $5b in debt

CFO Desheh: Teva’s ability to raise this amount in a volatile market is a testament to our strength and market confidence in our business performance.

Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) yesterday successfully priced a debt offering by three of its special purpose finance subsidiaries, consisting of six tranches:

  • Teva Pharmaceutical Finance IV raised $200 million of three-month LIBOR + 0.80% floating rate senior notes, which mature in May 2013.
  • Teva Pharmaceutical Finance Company B.V raised $1.1 billion of three-month LIBOR + 0.90% floating rate senior notes, which mature in November 2013.
  • Teva LLC raised $1 billion of 1.7% fixed rate senior notes, which mature in November 2014.
  • Teva BV raised $950 million of 2.4% fixed rate senior notes, which mature in November 2016.
  • Teva BV raised $875 million of 3.650% fixed rate senior notes, which mature in November 2021.
  • Teva Pharmaceutical Finance IV B.V. raised $875 million of 3.65% fixed rate senior notes, which mature in November 2021.

Moody's Investor Services rates the notes A3 and Standard & Poor’s rates them A-. The notes will be guaranteed by Teva.

Teva CFO Eyal Desheh said, "Teva’s ability to raise this amount in a volatile market is a testament to our strength, as well as to the market’s confidence in our business performance and ability to continue to generate free cash flow. In addition to being the largest offering ever done by an Israeli company, we had demand substantially in excess of the final order book, indicating extraordinary interest by investors in being a part of Teva’s future."

Teva intends to use the net proceeds to repay $3.75 billion of short-term debt used to finance its acquisition of Cephalon in October 2011, to finance the anticipated conversion of certain convertible senior subordinated notes issued by Cephalon and, to the extent of any remaining net proceeds, for general corporate purposes.

Teva offered the securities under its shelf prospectus filed with the Securities and Exchange Commission. The underwriters are Barclays Capital Inc., BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman, Sachs & Co., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC. Offers and sales of the senior notes may be made only by the related prospectus and prospectus supplement. Closing of the offering is expected on November 10, 2011.

Teva's share price rose 1.9% on Nasdaq yesterday to $41.72, giving a market cap of $37.17 billion, and rose 0.46% in early morning trading on the TASE to NIS 152.50.

Published by Globes [online], Israel business news - www.globes-online.com - on November 8, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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