Pfizer's $31 Billion Bond Sale Ranks Among Largest Ever

Adjusted for inflation, though, Verizon's mammoth 2013 deal remains the standard

Picture of man walking in front of building with Pfizer logo.
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Pfizer's planned debt sale this week, to help fund its acquisition of rival drugmaker Seagen, will rank among the largest individual corporate bond sales in U.S. history.

In a filing with the U.S. Securities and Exchange Commission late Tuesday, Pfizer said it plans to raise $31 billion of debt in a sale expected to close on Friday, and use proceeds for it $43 billion buyout of Seagen, known for its cancer drug therapies.

Pfizer expects to complete that buyout, its largest since 2009, by early 2024.

From a pure dollar standpoint, this week's sale marks the largest U.S. corporate debt offering in five years. In 2018, CVS Health sold $40 billion of bonds to help pay for its acquisition of health insurance giant Aetna.

It also would mark the fourth-largest bond sale in U.S. history. Verizon's $49 billion offering in 2013 remains the largest. AB InBev's 2016 offering of $46 billion ranked second.

On an inflation-adjusted basis, however, Pfizer's deal would rank behind offerings from Abbvie in 2019 and Comcast in 2018. And Verizon's deal would be valued at $63 billion today, twice the size of Pfizer's offering.

Nonetheless, the heft of Pfizer's issuance and the sheer cost of the Seagen acquisition amid a steep drop in sales of its Covid-19 vaccine have unnerved investors in recent weeks.

The company's shares have dropped 10% in the past month, extending a 27% slide since the beginning of the year.

Meanwhile, the Federal Trade Commission's attempt to block another pharmaceutical merger between Amgen and Horizon has cast further uncertainty about whether Pfizer and Seagen can complete their deal.

Yet the sale highlights this month's resurgence in the U.S. corporate bond market after a weak April. So far in May, companies have already come close to matching the $65.7 billion debt raised last month by investment-grade firms. Sales fell in April to the lowest in a decade for that month in the wake of turmoil in the U.S. banking system.

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  1. CNBC. "Pfizer to raise $31 billion in debt offering to fund Seagen acquisition, SEC filing shows."

  2. "Pfizer Selling $31 Billion of Bonds in Fourth-Largest Deal Ever."

  3. US Inflation Calculator

  4. MarketWatch. "Pfizer first-quarter results beat expectations despite COVID-19 vaccine sales plunge."

  5. "Does FTC attempt to block Amgen's Horizon buy spell trouble for Pfizer-Seagen? Not necessarily, analysts say."

  6. Reuters. "Corporate bond issuance picks up after slow April."

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