Yesterday, Pfizer; Today — Merck: Each With $5 Billion In Debt Offerings… That’s A Consensus.

It would seem that two teams of pretty savvy financial minds, working separately, expect that interest rates are likely to rise, in the near term.

Or, each of them thinks the life science industry-wide “risk spread” — over US Treasuries — is likely to widen, in the coming weeks, with Dr. Gottlieb’s departure from FDA, and talk of a bill for “Medicare for all”.

Or both. [Do note here that pharma, as a rule, is far less levered than other similarly large industries, and so these are more “crimes of opportunity” — than. . . necessity. Pfizer version here.] Here is the Merck bit, in any event:

. . . .Merck today priced a $5.0 billion public offering of four series of senior unsecured notes (collectively, the “Notes”). The Notes include:

# $750 million of 2.90% notes due 2024

# $1,750 million of 3.40% notes due 2029

# $1,000 million of 3.90% notes due 2039

# $1,500 million of 4.00% notes due 2049

Merck intends to use the net proceeds from the offering for general corporate purposes, including without limitation the repayment of outstanding commercial paper borrowings and other indebtedness with upcoming maturities. The offering is expected to close on March 7, 2019, subject to customary closing conditions.

Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are acting as the active joint book-running managers for the offering, . . .

Now you know. I would say that the new golden age of life science regulatory easing. . . is drawing to a close. Smile. “Only the penitent man. . . shall pass. . . .”


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