Pfizer-Backed Viatris Eyes Jumbo Bond Sale for Mylan Combination
Pfizer-Backed Viatris Eyes Jumbo Bond Sale for Mylan Combination
(Bloomberg) -- Pfizer Inc.-backed Viatris is lining up a potential jumbo bond sale in Europe and the U.S. to help pay for the Viagra maker’s combination with Mylan NV.
The issuer may sell four euro tranches as long as 12 years, and/or dollar bonds maturing in up to 30 years, according to information from a person familiar with the matter, who is not authorized to speak publicly and asked not to be identified. Investor calls start on Monday, the person said.
Pfizer will initially guarantee the new notes issued by Upjohn Inc., the person said, as the company reshapes its business by injecting older blockbuster medicines such as Lipitor and Viagra into generic maker Mylan. The potential offerings will test investor risk appetite at a time when a record-breaking credit deluge has started to wobble amid renewed coronavirus concerns.
Plans to combine Pfizer’s Upjohn off-patent unit with Mylan were announced last year. New York-based Pfizer will retain 57% of the new business, while Mylan shareholders will get 43%, according to a statement at the time. The deal is due to close this year.
Pfizer’s U.S. press-relations office said no one could immediately comment on the bond sale.
The combined business will have about $19 billion in annual sales and an Ebitda margin of about 37%, S&P Global Ratings said in a note last week. The pandemic will have little direct impact on the company, according to the ratings provider.
S&P will rate the Viatris notes BBB-, or one step above junk. Moody’s Investors Service has a comparable grade, while Fitch Ratings Ltd. is one step higher. Issuer Upjohn will eventually be renamed Viatris.
The new business will have about $24.5 billion in debt and an investment-grade credit rating, Pfizer and Mylan said when they announced the combination.
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