Organon starts roadshow for $4.5 billion equivalent seven-, 10-year notes in three tranches

By Paul A. Harris

Portland, Ore., April 5 – Organon & Co. began a roadshow on Monday for a $4.5 billion equivalent offering of notes in three tranches, according to a syndicate source.

Tranches are as follows:

• $2 billion seven-year senior secured notes, callable after three years at par plus 50% of the coupon, with initial talk in the low 4% area;

• $1 billion equivalent euro-denominated seven-year senior secured notes, callable after three years at par plus 50% of the coupon, with initial talk in the low 3% area; and

• $1.5 billion 10-year senior unsecured notes, callable after five years at par plus 50% of the coupon, with initial talk in the mid-to-high 5% area.

The roadshow wraps up on Wednesday, and the Rule 144A and Regulation S for life notes are set to price on Thursday.

Left lead bookrunner Morgan Stanley & Co. LLC will bill and deliver. J.P. Morgan Securities LLC, BofA Securities Inc., BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC and HSBC Securities (USA) Inc. are joint bookrunners.

Mizuho Securities USA Inc., Wells Fargo Securities LLC, Barclays, RBC Capital Markets LLC, Santander Investment Securities Inc. and SG Americas Securities LLC are co-managers.

Upon release from escrow the proceeds plus cash on the balance sheet and proceeds from a term loan will be used to fund a dividend to Merck & Co., Inc., related to Organon's spinoff from Merck.

The issuing entity will be Organon Finance 1 LLC, to be assumed by Organon & Co.

The Kenilworth, N.J.-based company was created by Merck's spinoff of its women’s health, trusted legacy brands and biosimilars businesses.

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