Teva launches $2.75 billion of bonds to repay bridge financing for Ivax merger

By Ronda Fears

Nashville, Jan. 25 - Teva Pharmaceuticals Industries Ltd. launched $2.75 billion of bonds for Thursday's business to repay the bridge loans it incurred in the acquisition of Ivax Corp., which is slated to close Thursday.

For the convertibles portions, a Teva finance unit is pitching a $750 million tranche of 20-year convertible senior notes talked with a coupon of 1.5% to 2% and an initial conversion premium of 22.5% to 27.5%; the issue is non-callable for five years with a put in year five. A $500 million tranche of 20-year convertible senior unsecured bonds is talked with 0.25% to 0.5% coupon and a 14% to 17% initial conversion premium; the issue is non-callable for two years with a put in year two. Both convertible tranches have full dividend and takeover protection.

Also, Teva is selling $500 million of 10-year senior notes and $1 billion of 30-year senior notes, but guidance for that paper was being gauged against the convertibles and would probably not be circulated until sometime Thursday, market sources said.

The convertibles are scheduled to price after the market close Thursday, and syndicate officials said the straight bonds would likely price just ahead of the convertible or just afterward.

Proceeds are earmarked to repay bridge financing for the Petach Tikva, Israel-based generic drug maker's acquisition of Ivax Corp., which is set to close Thursday.

Joint mangers of the convertible transactions are Lehman Brothers Inc., Credit Suisse and Bear Stearns & Co. Inc.

Joint managers for the corporate bonds are Lehman, Credit Suisse and Citigroup Global Markets Inc.

Teva shares (Nasdaq: TEVA) ended Wednesday off by 32 cents, or 0.78%, at $40.63.

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