By Andrea Heisinger
New York, Sept. 27 - Watson Pharmaceuticals, Inc. priced $3.9 billion of senior notes (Baa3/BBB/BBB-) in three tranches on Thursday, an informed source said.
The deal size was increased slightly from a ballpark of $3.75 billion given in a press release.
A $1.2 billion tranche of 1.875% five-year notes priced at 99.541 to yield 1.972% with a spread of Treasuries plus 135 basis points. The notes were sold at the tight end of guidance in the 145 bps area, plus or minus 10 bps.
There is a make-whole call at Treasuries plus 20 bps.
There was also $1.7 billion of 3.25% 10-year notes priced at 99.165 to yield 3.349% with a spread of 170 bps over Treasuries. Price talk was in the 180 bps area, plus or minus 10 bps.
The 10-year notes have a make-whole call option at 25 bps over Treasuries.
A final part was $1 billion of 4.625% 30-year bonds sold at 98.516 to yield 4.718% with a spread of Treasuries plus 190 bps. The tranche sold at the low end of guidance in the 200 bps area, plus or minus 10 bps.
The bonds feature a make-whole call at Treasuries plus 30 bps.
There is a change-of-control provision at 101%.
Bookrunners were Bank of America Merrill Lynch, Barclays, J.P. Morgan Securities LLC and Wells Fargo Securities LLC.
Proceeds, along with those from a term loan facility, cash on hand and possibly borrowings under a senior revolving credit facility, are being used to fund a portion of the cash consideration for the acquisition of Actavis Group.
There is a mandatory call at 101 if the acquisition is not done by Feb. 28, 2013.
The drug company was last in the market with a split-rated $850 million offering in two tranches on Aug. 18, 2009.
The deal included 5% five-year notes and 6.125% 10-year notes, both priced at 262.5 bps over Treasuries.
Watson is a Parsippany, N.J.-based pharmaceutical maker of generics and specialized branded products for women's health.
| Issuer: | Watson Pharmaceuticals, Inc.
|
| Issue: | Senior notes
|
| Amount: | $3.9 billion, increased from $3.75 billion
|
| Bookrunners: | Bank of America Merrill Lynch, Barclays, J.P. Morgan Securities LLC, Wells Fargo Securities LLC
|
| Change-of-control put: | 101%
|
| Mandatory call: | At 101 if Actavis acquisition not done by Feb. 28, 2013
|
| Trade date: | Sept. 27
|
| Settlement date: | Oct. 2
|
| Ratings: | Moody's: Baa3
|
| Standard & Poor's: BBB
|
| Fitch: BBB-
|
|
|
| Five-year notes
|
| Amount: | $1.2 billion
|
| Maturity: | Oct. 1, 2017
|
| Coupon: | 1.875%
|
| Price: | 99.541
|
| Yield: | 1.972%
|
| Spread: | Treasuries plus 135 bps
|
| Call: | Make-whole at Treasuries plus 20 bps
|
| Price talk: | 145 bps area, plus or minus 10 bps
|
|
|
| 10-year notes
|
| Amount: | $1.7 billion
|
| Maturity: | Oct. 1, 2022
|
| Coupon: | 3.25%
|
| Price: | 99.165
|
| Yield: | 3.349%
|
| Spread: | Treasuries plus 170 bps
|
| Call: | Make-whole at Treasuries plus 25 bps
|
| Price talk: | 180 bps area, plus or minus 10 bps
|
|
|
| 30-year bonds
|
| Amount: | $1 billion
|
| Maturity: | Oct. 1, 2042
|
| Coupon: | 4.625%
|
| Price: | 98.516
|
| Yield: | 4.718%
|
| Spread: | Treasuries plus 190 bps
|
| Call: | Make-whole at Treasuries plus 30 bps
|
| Price talk: | 200 bps area, plus or minus 10 bps
|
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