Watson Pharmaceuticals talks about $3.75 billion of notes in five-, 10-, 30-year tranches

By Andrea Heisinger

New York, Sept. 27 - Watson Pharmaceuticals, Inc. announced it will sell about $3.75 billion of senior notes (Baa3/BBB/) in three tranches on Thursday, according to a press release and filing with the Securities and Exchange Commission.

The deal will include maturities of 2017, 2022 and 2042. There is a change-of-control provision at 101.

A source said that guidance for the five-year notes was in the 145 basis points area, the 10-years were being talked in the 180 bps area and the 30-year bonds had guidance in the 200 bps area. All had a margin of plus or minus 10 bps.

Bookrunners are Bank of America Merrill Lynch, Barclays, J.P. Morgan Securities LLC and Wells Fargo Securities LLC.

Proceeds, along with those from a term loan facility, cash on hand and possibly borrowings under a senior revolving credit facility, are being used to fund a portion of the cash consideration for the acquisition of Actavis Group.

There is a mandatory call at 101 if the acquisition is not done by Feb. 28, 2013.

Watson is a Parsippany, N.J.-based pharmaceutical maker of generics and specialized branded products for women's health.

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