The debt recycling exercise by Teva Pharmaceutical Industries Ltd. (TASE: TEVA; NYSE: TEVA) is underway, with the company pricing its issue of sustainability-linked senior notes yesterday. Last week, Teva announced an offering of $4 billion of these notes, but in the end the offering was expanded to $5 billion. Teva pointed out that this was the largest-ever offering of sustainability-linked notes, and the first-ever by a generic medicine company. "The transaction marks Teva’s debut into Sustainable Finance and is tied to targets that include improving access to medicines in low- and middle-income countries (LMICs) and reducing greenhouse gas (GHG) emissions," the company said.
The notes consist of Teva Pharmaceutical Finance Netherlands II B.V.'s €1.1 billion aggregate principal amount of 3.750% euro-denominated Sustainability-Linked Senior Notes maturing in 2027; Teva Finance II’s €1.5 billion aggregate principal amount of 4.375% euro-denominated Sustainability-Linked Senior Notes maturing in 2030; Teva Pharmaceutical Finance Netherlands III B.V.'s $1.0 billion aggregate principal amount of 4.750% US dollar-denominated Sustainability-Linked Senior Notes maturing in 2027; and Teva Finance III’s $1.0 billion aggregate principal amount of 5.125% US dollar-denominated Sustainability-Linked Senior Notes maturing in 2029.
Teva says that it will use the proceeds from the offerings to fund the announced tender offer to purchase, for cash, its 1.250% Senior Notes due 2023, its 2.800% Senior Notes due 2023, its 3.250% Senior Notes due 2022, its 2.950% Senior Notes due 2022, its 1.125% Senior Notes due 2024 and its 6.000% Senior Notes due 2024 for a maximum combined aggregate purchase price (exclusive of accrued and unpaid interest) of up to $3.5 billion, and to pay associated fees and expenses; to fund the repayment of outstanding debt upon maturity, tender offer or earlier redemption; and for general corporate purposes.
Teva took on most of its debt in 2016 in order to help finance the acquisition of Actavis from Allergan, a deal worth nearly $40 billion, mostly in cash, that in retrospect was not a successful one for Teva, causing it operational and liquidity problems. In the past few years, as it carried out an extensive streamlining plan, Teva has succeeded in reducing the scope of its debt. At the end of the third quarter of this year it totaled $23.7 billion.
Teva, headed by Kare Schultz, has a market cap of $11.2 billion. Its share price shot up yesterday by 9.53% following the report that, along with other drug companies, it had won a case in a California court in connection with the marketing of opioid-based pain relievers. On the Tel Aviv Stock Exchange this morning, Teva's share price is up 1.12%, at NIS 31.58.
Published by Globes, Israel business news - en.globes.co.il - on November 3, 2021.
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