Pfizer Sells $4.5 Billion of Bonds in Five Parts to Repay Debt

May 12, 2014 5:29 pm ET

May 12 (Bloomberg) -- Pfizer Inc., the U.S. drugmaker seeking to acquire AstraZeneca Plc, sold $4.5 billion of bonds to repay securities that mature within a year.

The offering, which was increased from $4.25 billion, included $1.5 billion of 2.1 percent, five-year notes that yielded 48 basis points more than similar-maturity Treasuries, according to data compiled by Bloomberg.

Proceeds of the issue will be used to repay 900 million euros ($1.2 billion) of 4.75 percent notes due in December, and a portion of the company’s $3 billion of 5.35 percent notes due March 2015, according to a regulatory filing today.

The bond sale comes as the biggest U.S. drugmaker is offering about $106 billion for London-based AstraZeneca. Along with the lower tax rate linked to AstraZeneca’s U.K. base, Chief Executive Officer Ian Read has said the acquisition would give New York-based Pfizer a promising new generation of experimental cancer drugs that use the body’s own immune system to attack the disease.

Read has been summoned by separate parliamentary committees to testify on the U.S. company’s offer for AstraZeneca, amid growing public and political concern that a takeover would mean job losses and cuts to research.

In one potential scenario, a successful acquisition would entail borrowing “more than $30 billion,” Carol Levenson, a New York-based analyst at Gimme Credit LLC, wrote in a report today.

Pfizer also sold $1 billion of 1.1 percent, three-year notes at 25 basis points more than benchmarks, $1 billion of 3.4 percent, 10-year bonds at a relative yield of 80 basis points, and $500 million of 4.4 percent, 30-year debentures with a 95 basis-point spread, Bloomberg data show. The company also issued $500 million of three-year, floating-rate securities at 15 basis points more than the London interbank offered rate.

The company’s $1 billion of 3 percent notes due 2023 fell 0.4 cent to 97.7 cents on the dollar for a yield of 3.3 percent on May 9, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.