Teva places $5B-equivalent of cross-border sustainability-linked bonds; terms

Teva Pharmaceutical Industries Ltd. has completed its roughly $5 billion-equivalent offering of unsecured sustainability-linked bonds, which were priced as follows:

* €1.1 billion of 5.5-year notes due May 9, 2027, at par to yield 3.75%.
* €1.5 billion of 8.5-year notes due May 9, 2030, at par to yield 4.375%.
* $1 billion of 5.5-year notes due May 9, 2027, at par to yield 4.75%.
* $1 billion of 7.5-year notes due May 9, 2029, at par to yield 5.125%.

The deal was initially guided in a roughly $4 billion area, with guidance in the 4% area and 4.625% area on euro 5.5-year and 8.5-year notes, respectively, and in the 5% area and 5.375% area on dollar 5.5-year and 7.5-year tenors. Final guidance was 3.75%-3.875%, 4.375%-4.50%, 4.75%-4.875% and 5.125%-5.250% on each tranche, respectively.

BNP Paribas, BofA Securities, HSBC and J.P. Morgan were bookrunners. Ratings are BB-/Ba2.

Proceeds will be used to refinance debt and to fund a $3.5 billion tender offer for debt maturing from 2022-2024. Initial price thoughts were low 4% range and high 4% range on the 5.5-year and 8.5-year euro notes, respectively. IPTs on the dollars were given in a very high 4% range on the 5.5-year, with an additional 37.5 basis points on 7.5-year dollar bonds.

The bonds feature two sustainability key performance indicators, the first linked to medicines and the second to greenhouse gas reductions. Under the first key performance indicator, the company will make regulatory submissions across six key therapeutic areas and increase access to medicine programs.

On the 5.5-year notes, a 12.5-basis-point coupon step-up will apply at maturity per sustainability performance target not met, which is capped at 45 bps. On the longer euro and dollar notes, a 12.5-bps coupon step-up per sustainability performance target missed and per annum will apply from November 2026 until maturity, set at a maximum of 37.5 bps.

Terms: