Teva upsizes to $2.49 billion, hones talk on four-part notes offering; pricing Wednesday

By Paul A. Harris

Portland, Ore., March 1 – Teva Pharmaceutical Industries Ltd. upsized its public offering of sustainability-linked senior notes (Ba2/BB-/BB-) to $2.49 billion equivalent from $2.06 billion equivalent and tightened talk, according to market sources.

The four revised bullet tranches come as follows:

• $600 million 6.5-year notes, final talk 7 7/8% (revised from 7 7/8% to 8 1/8%; initial talk 8% area), upsized from $500 million;

• $500 million 8.5-year notes, final talk 8 1/8% (revised from 8 1/8% to 8 3/8%; initial talk low 8% area);

• €800 million 6.5-year notes, final talk 7 3/8% to 7½% (revised from 7½% to 7¾%; initial talk high 7% area), upsized from €500 million; and

• €500 million 8.5-year notes, final talk 7 7/8% to 8% (revised from 8% to 8¼%; initial talk low 8% area).

The notes are set to price on Wednesday.

The notes feature sustainability performance target step-ups to maximums of 30 basis points per tranche, relative to specified key performance indicators, which will be subject to testing beginning on Dec. 31, 2025.

The targets include increasing access to medicine programs, as well as reducing greenhouse gas emissions.

The notes are covered by make-whole calls at benchmarks plus 50 bps until three months prior to their maturities, whereupon they become callable at par.

Proceeds plus cash on hand will be used to fund up to $2.25 billion equivalent of tender offers involving the following:

• Teva Pharmaceutical Finance Netherlands III BV’s 7 1/8% senior notes due 2025;

• Teva Pharmaceutical Finance Netherlands III BV’s 6% senior notes due 2025;

• Teva Pharmaceutical Finance Netherlands II BV’s 4½% senior notes due 2025;

• Teva Pharmaceutical Finance Netherlands III BV’s 2.8% senior notes due 2023;

• Teva Pharmaceutical Finance Netherlands III BV’s 6% senior notes due 2024; and

• Teva Pharmaceutical Finance Netherlands III BV’s 3.15% senior notes due 2026.

Active bookrunner Citigroup Global Markets Europe AG will bill and deliver for the euro-denominated notes. Goldman Sachs Bank Europe SE, Mizuho Securities Europe GmbH, MUFG Securities (Europe) NV and PNC Capital Markets LLC are also active bookrunners.

BofA Securities Europe SA, BNP Paribas, HSBC Bank plc, Intesa Sanpaolo SpA and J.P. Morgan SE are passive bookrunners for the euro-denominated notes.

Active bookrunner Goldman Sachs Bank Europe SE will bill and deliver for the dollar-denominated notes. Citigroup Global Markets Inc., Mizuho Securities USA LLC, MUFG Securities Americas Inc. and PNC Capital Markets LLC are also active bookrunners for the dollar notes.

Passive bookrunners are BofA Securities, Inc., BNP Paribas Securities Corp., HSBC Bank plc, Intesa Sanpaolo SpA and J.P. Morgan SE.

Bank of New York Mellon is the trustee.

Counsel to the issuer is provided by Kirkland & Ellis LLP with assistance from Agmon with Tulchinsky Law Firm for matters related to Israeli law and from Van Doorne NV for Dutch law matters. Counsel to the underwriters is provided by Baker & McKenzie LLP for U.S. and U.K. law and by Herzog, Fox & Neeman for Israeli law.

The issuing entities will be Teva Pharmaceutical Finance Netherlands II BV and Teva Pharmaceutical Finance Netherlands III BV.

The issuer is a Tel Aviv-based pharmaceutical manufacturer.

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