Key insights
- Novartis is issuing US dollar bonds to refinance debt from its $12 billion acquisition of Avidity Biosciences. The offering, spanning maturities from 3 to 30 years, suggests a slight increase in corporate debt supply, potentially exerting minor downward pressure on equity valuations due to increased competition for capital. However, the impact is limited as it's a refinancing move by a large, stable company.
Investing.com -- Novartis AG is marketing investment-grade US dollar bonds to help finance its $12 billion acquisition of Avidity Biosciences Inc.
A unit of the Swiss drugmaker is offering bonds in eight tranches, with maturities ranging from three to 30 years, according to a company filing. The proceeds will be used to repay a bridge loan from Feb. 26 that was used to finance the acquisition.
The initial price talk on the longest tenor, a bond maturing in 2056, is at about 1.2 percentage points over Treasuries, according to a Bloomberg report Monday.
BNP Paribas SA, Citigroup Inc, Deutsche Bank AG, JPMorgan Chase & Co and Mizuho Financial Group Inc are managing the sale.
Novartis agreed to acquire Avidity in October as part of a push to focus on innovative drugs in core areas including heart, kidney and metabolic drugs, immunology, neuroscience and oncology. The transaction closed last month.
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