Teva borrows approximately $8.5 billion during third-quarter 2011

By Aleesia Forni

Columbus, Ohio, Nov. 2 - Teva Pharmaceutical Industries Ltd. entered into multiple loan agreements during the third quarter of 2011 to fund both its Cephalon, Inc. and Taiyo Pharmaceutical Industry Co. Inc. acquisitions, according to a 6-K filed with the Securities and Exchange Commission.

In June, the company entered into new and revised credit agreements providing $5.5 billion to finance the acquisition of Cephalon, among other uses.

The company also entered a $1.5 billion bridge loan facility in September in order to finance the Cephalon acquisition.

Pricing on the bridge loan is Libor plus 87.5 bps for the first 90 days and Libor plus 112.5 bps afterwards.

This bridge facility matures in March 2012.

On Oct. 11, the company borrowed $6.5 billion under the June and September facilities for the Cephalon acquisition, which it plans to repay with proceeds of new long-term debt.

The company entered a $1 billion credit agreement in July to finance its acquisition of Taiyo, and the acquisition closed on July 14.

In order to provide additional liquidity, the company entered a $500 million loan agreement in October, which matures on Oct. 7, 2012.

Interest is Libor plus 80 bps for the first 180 days, Libor plus 90 bps up until 270 days and then Libor plus 110 bps.

For both the bridge loan and the $500 million loan agreement, the company must maintain a consolidated net debt to EBITDA of no more than 3.50 to 1 and an interest cover ratio of no less than 3.50 to 1.

For the bridge facility, Morgan Stanley Senior Funding, Inc., Citibank NA, London Branch and Goldman Sachs International served as bookrunners and mandated lead arrangers.

Barclays Capital was coordinating bookrunner and mandated lead arranger, while Barclays Bank plc served as administrative agent and documentation agent.

For the $500 million loan, HSBC Bank USA NA was administrative agent, documentation agent, coordinating bookrunner and mandated lead arranger.

Teva is a Petach Tikva, Israel-based pharmaceutical company.

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