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Teva Raises $2.1 Billion in Debt Tender Offer

Teva originally aimed to raise $1.5 billion, to redeem previous debentures it raised to finance the $40.5 billion acquisition of Actavis in 2016

Sophie Shulman 09:5020.11.19
Teva Pharmaceutical Industries Ltd. announced on Tuesday it has completed its debt tender offer opened earlier this month, upsizing it from the $1.5 billion it aimed to raise to $2.1 billion. The company announced the tender to redeem previous debentures it raised to fund the $40.5 billion acquisition of Actavis in 2016.

 

Teva has benefited from the current demand in the bond markets for high-paying bonds with lower credit ratings. Teva’s dollar notes, issued at an aggregate principal amount of $1 billion, carry a 7.125% interest. Teva’s euro notes, issued at an aggregate principal amount of $1.1 billion, have a 6% interest.

 

Teva CEO Kåre Schultz. Photo: Bloomberg Teva CEO Kåre Schultz. Photo: Bloomberg

 

 

“With this transaction and the tender offer and bond redemption, we have aligned our maturity profile for the coming years with our core operational performance, as we continue to focus on delivering our business objectives and long term goals,” Teva CEO Kåre Schultz said in a statement.

 

Teva needs to repay $2 billion in 2020 and $4 billion in 2021. Currently, the company only has $1.2 billion in its coffers. The company ended the third quarter of 2019 with a net debt of $25.7 billion—a significant reduction from the $34 billion at which it stood two years ago—but the company’s continued drop in revenues and profitability cast doubt on its ability to carry its debt covenants.
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