Hefty high-grade debt offering eyed for AbbVie, Allergan merger

By Cristal Cody

Tupelo, Miss., June 26 – AbbVie Inc. (Baa2/A-) is expected to issue about $40 billion of new investment-grade debt to fund its acquisition of Allergan plc (BBB/BBB-) announced on Tuesday, according to a market source and press releases.

The cash and stock acquisition of the Dublin-based pharmaceutical manufacturer is valued at about $63 billion.

AbbVie said it has secured underwritten financing commitments from Morgan Stanley Senior Funding, Inc. and MUFG Bank, Ltd. for approximately $38 billion to finance, together with cash on hand, the cash portion of the acquisition.

The merger is expected to close by early 2020.

AbbVie said the combined company will produce a robust cash flow, and it intends to reduce debt levels by $15 billion to $18 billion by the end of 2021.

The company was in the high-grade primary market in 2018 with a $6 billion four-part offering of senior notes that priced Sept. 13, 2018.

AbbVie is a biopharmaceutical company based in North Chicago, Ill.

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