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Pfizer Prices $4.5 Billion Debt Offering

Pfizer Inc. (NYSE:PFE) has announced the pricing of a debt offering totalling $4.5 billion shortly before also announcing that an offer for AstraZeneca plc would represent “compelling shareholder value” for its members. However, in the same statement Pfizer also stated it remained “disappointed at the lack of engagement by the AstraZeneca Board”.

Pfizer has said that combining the two pharmaceutical giants would address risks within the industry, create savings in operations and create a fully balanced portfolio of products. Furthermore, in its statement, Pfizer has committed to retaining 20% of the potential combined company’s total research & development workforce in the United Kingdom and creating an innovation hub in Cambridge.

This week’s Pfizer debt offering consists of five tranches of notes:

  • $1,000,000,000 aggregate principal amount of 1.1% notes due 2017
  • $500,000,000 aggregate principal amount of floating rate notes due 2017
  • $1,500,000,000 aggregate principal amount of 2.1% notes due 2019
  • $1,000,000,000 aggregate principal amount of 3.4% notes due 2024
  • $500,000,000 aggregate principal amount of 4.4% notes due 2044

Pfizer intends to use the net offering proceeds for general corporate purposes, including

  1. pre-funding the repayment at maturity of the €900 million outstanding of its 4.75% notes due December 2014;
  2. pre-funding a portion of its outstanding 5.35% notes due March 2015

Pfizer may use funds that are not immediately needed for these purposes to temporarily invest in short-term marketable securities or repay a portion of its outstanding commercial paper.

The closing of the offering is expected to occur on May 15, 2014, subject to satisfaction of customary closing conditions.

Merrill, Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC are acting as joint book-running managers for the offering.

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