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Takeda to issue up to $20bn in bonds for Shire takeover

Drugmaker set to become Japan's biggest-ever bond issuer surpassing SoftBank

  © Reuters

TOKYO -- Japanese drugmaker Takeda Pharmaceutical is set to issue up to $20 billion (2.2 trillion yen) in bonds to finance its acquisition of Ireland-based drugmaker Shire, in what would be the biggest-ever debt issuance by a Japanese company, Nikkei learned Monday.

The plan would allow the Osaka-based company to take advantage of low interest rates in Japan, where many institutional investors are hungry for investment opportunities offering higher yields.

Under the plan, Takeda would borrow $30.8 billion (3.36 trillion yen) from a syndicate of banks led by J.P. Morgan Chase. Once the takeover is complete, Takeda would replace some of the loans with longer-term debt to stabilize its finances.

Specifically, Takeda will issue dollar-denominated straight bonds worth $15 billion in addition to yen-denominated subordinate loans worth about $4.5 billion. The subordinated debt will have the option of being converted into equity later on.

The details of the financing plan are still being worked out with financial institutions.

Takeda's shareholders agreed earlier this month on a plan to take over Shire for 46 billion U.K. pounds (6.8 trillion yen) in the biggest-ever buyout by a Japanese company.

The planned debt issuance will also be a Japanese record. According to Thomson Reuters, the size of the upcoming bond issue would be the largest ever in Japanese corporate history, eclipsing a $6 billion issuance by SoftBank last year.

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