Teva Pharmaceutical Industries Ltd (ADR) (TEVA) Prices Upsized $4.5B Debt Offering

Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) announced that it successfully priced the offering of $4.5 billion of its previously announced senior notes. The offering was upsized from a previously announced amount of $3.5 billion. Net proceeds from the Notes are expected to be used to repay approximately $2.3 billion outstanding indebtedness under its U.S. Dollar and Japanese Yen term loan agreements and, together with cash on hand, to redeem all $1.5 billion aggregate principal amount of its 1.40% Senior Notes due 2018 and all $1.2 billion aggregate principal amount of its 2.875% Senior Notes due 2019.

“With the successful pricing of $4.5 billion of senior notes, we have completed an important piece of our financial plan. Furthermore, having taken care of our financing requirements for the coming years, Teva will now focus on execution of our restructuring plan and optimization of our business,” said Mike McClellan, Teva’s Executive Vice President and Chief Financial Officer.

The Notes consist of (i) $1.25 billion aggregate principal amount of 6.000% USD-denominated senior notes maturing in 2024 and $1.25 billion aggregate principal amount of 6.750% USD-denominated senior notes maturing in 2028, and (ii) €700 million aggregate principal amount of 3.250% EUR-denominated senior notes maturing in 2022 and €900 million aggregate principal amount of 4.500% EUR-denominated senior notes maturing in 2025, and will be issued by special purpose finance subsidiaries of Teva (the “Issuers”).

The Notes will be sold at a price of 100% of the principal amount thereof. The Issuers and Teva expect to enter into registration rights agreements with respect to the Notes. The settlement of the Notes is expected to occur on or about March 14, 2018, subject to customary closing conditions.

Teva will provide notice of redemption of the 1.40% Senior Notes due 2018 and the 2.875% Senior Notes due 2019 to holders of such notes and redemption of these notes is expected to be completed during the first quarter of 2018.

The Notes will be unsecured senior obligations of the Issuers and will be unconditionally guaranteed on a senior basis by Teva. The Notes were offered and sold (i) in the U.S. to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and (ii) to non-U.S. persons in offshore transactions outside the U.S. pursuant to Regulation S under the Securities Act.

The Notes and the related guarantees have not been registered under the Securities Act or the laws of any state and may not be offered or sold in the U.S. or to, or for the benefit of, any U.S. persons absent registration under or an applicable exemption from the registration requirements under the Securities Act and applicable state securities laws.

Analyst Ratings

On the ratings front, Teva has been the subject of a number of recent research reports. In a report issued on March 1, Maxim analyst Jason Kolbert maintained a Hold rating on TEVA, without offering a price target. On February 15, Mizuho’s Irina Rivkind Koffler reiterated a Buy rating on the stock and has a price target of $23.

According to, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Jason Kolbert and Irina Rivkind Koffler have a yearly average loss of -6.7% and a return of 13.1% respectively. Kolbert has a success rate of 36% and is ranked #4680 out of 4774 analysts, while Koffler has a 49% success rate and is ranked #352.

Most of Wall Street echoes a neutral point of view, with TipRanks analytics exhibiting TEVA as a Hold. Based on 20 analysts polled in the last 3 months, 5 rate TEVA stock a Buy, 11 issue a Hold, while 4 recommend a Sell. The 12-month average price target stands at $19.43, marking a slight upside potential. 

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