- The Washington Times - Tuesday, March 17, 2009

TRENTON, N.J. (AP) - Drugmaker Pfizer Inc. is selling an unspecified number of bonds to replace short-term loans covering about one-third of the cost of its planned acquisition of rival Wyeth.

The senior, unsecured bonds will be sold in groups with maturities of three, six, 10 and 20 years. The sales are expected to close within a couple of days.

The $68 billion cash, stock and debt deal to buy Wyeth includes borrowing $22.5 billion in a bridge loan arranged with five major investment banks. Last Thursday, Pfizer said in a Securities and Exchange Commission filing that those banks have further syndicated portions of the bridge loan to a total of 29 additional banks, with none of the banks financing more than $1.5 billion of the total.

But the bridge loans are set to expire on Dec. 31, so they have to be replaced, according to Pfizer spokeswoman Joan Campion.

“It’s just replacing the short-term debt with the longer-term debt,” she said.

Pfizer had previously said it might enter the bond market “to replace much of the bridge financing,” Campion noted.

On Monday, the New York-based company filed a preliminary prospectus supplement with the SEC stating it is offering the bonds. The filing did not include information on pricing or interest rates for the bonds. The company said it would have those numbers when the offering is complete.

Moody’s Investors Service on Monday assigned ratings of Aa2, its third-highest, to the new bonds but said they are under review for possible downgrade related to the Wyeth deal.

Pfizer has not disclosed the interest rate of the bridge loans but told investors in January it is “within the range of market rates.”

Pfizer’s drugs include impotence treatment Viagra, pain treatments Celebrex and Lyrica, and cholesterol pill Lipitor, the world’s top-selling drug with 2008 revenue of $12.4 billion. Wyeth, of Madison, N.J., makes the antidepressant Effexor and the vaccine Prevnar for ear and other children’s infections.

Buying Wyeth would help Pfizer diversify by adding Wyeth’s consumer health and animal medicine businesses, as well as its division that makes biologic drugs, a prized area because they command high prices and so far have not faced generic competition.

The deal is set to close this fall.

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