Pfizer preps for major bond deal

These days, drugmakers are heroes--in the financial markets. All the M&A activity in the pharma sector is certainly funding many an investment banker's paycheck. And every pharma company that goes to the bond markets looking for financing has been well rewarded: Consider Roche and its double issues, one in the U.S. and the other across the pond. Its $16 billion U.S. deal was the largest ever.

Today, the bond-market gladiator is Pfizer, which is prepping an offering to fund its $68 billion buyout of Wyeth. Pfizer is expected to use the bond proceeds to refinance a $22.5 billion bridge loan it already has secured to help pay for Wyeth. The upcoming bond issue could be bigger than Roche's record-setter, the Wall Street Journal reports.

Typically, companies use bridge loans to make their deals and then hit the bond markets up later. But bond investors are hungry for top-rated corporate debt--especially bonds in so-called "defensive sectors" like pharma, which are considered to be better able to weather economic downturns. So companies are going to the bond markets earlier.

Some details on the Pfizer bonds: The deal will include four fixed-rate maturities ranging from three to 30 years, and one two-year, floating rate tranche. Citigroup, Barclays, Bank of America and J.P. Morgan Chase will handle the sales. Pricing is expected today, the WSJ said.

- read the WSJ story

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