Novartis successfully floated a $5 billion bond issue this week. Big news? It wouldn't have been 18 months ago. But now, with the credit markets tighter than a childproof cap, the very fact that the drugmaker found buyers for its debt is headline-worthy.
Here's the nitty-gritty. Two tranches: $2 billion in five-year bonds with a 4.125 percent coupon; $3 billion in 10-years with a 5.125 coupon. They're out of a shelf registration the drugmaker filed last year. The news release says these billions "enhance the financial flexibility of Novartis" and will be used for "general corporate purposes."
Does this mean deals? Maybe; last week CEO Dan Vasella said during an earnings call that Novartis wasn't interested in mega-deals, but was on the lookout for small companies to snap up. The drugmaker's pharma chief, Joe Jimenez, said last week that it's aiming for more buyouts than it managed last year (three).
- see Novartis' release
ALSO: Vatican Radio bounced Novartis CEO Dan Vasella from a guest commentator spot when it found out that the drugmaker sells birth control pills. Report