- The Washington Times - Tuesday, March 17, 2009

TRENTON, N.J. (AP) - Drugmaker Pfizer Inc. has sold $13.5 billion worth 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 were sold in groups with maturities of three, six, 10 and 20 years. IFR, a service of Thomson Reuters, said Bank of America, Barclays, Citigroup, Goldman Sachs and J.P. Morgan were among the bookrunners for the sale.

Pfizer’s $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 would offer the bonds. 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.

Late Tuesday, fellow ratings agency Fitch assigned a “AA” rating to Pfizer’s debt offering, which included $1.25 billion two-year floating rate notes priced at 195 basis points above the three-month London international bank offered rate, or LIBOR, according to IFR.

The bond sale also was comprised of $3.5 billion worth of three-year fixed-rate notes, $3 billion of six-year notes, $3.25 billion worth of 10-year notes and $2.5 billion in 30-year bonds, IFR said.

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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