TOKYO -- Takeda Pharmaceutical will issue up to 500 billion yen ($4.53 billion) in bonds to replace short-term loans used in financing last month's purchase of Irish drug developer Shire, the Japanese company said Friday.
Half the funds raised will count toward Takeda's capital as measured by S&P Global Ratings and Japan Credit Rating Agency, helping strengthen the company's balance sheet and prevent credit rating downgrades.
S&P's long-term issuer credit rating on Takeda stands at BBB+, one step above speculative grade.
The hybrid debt sale, which will take place as early as April, is expected to be one of the largest of its kind ever in Japan. The coupon rate and other terms have yet to be decided.
To finance its $62 billion acquisition of Shire, Japan's largest drugmaker issued dollar- and euro-backed straight bonds in overseas markets totaling roughly $14 billion.
The upcoming hybrid bonds will carry a 60-year maturity, with early redemption open five years and four months after the issue. Mitsubishi UFJ Morgan Stanley Securities, SMBC Nikko Securities and Mizuho Securities serve as the lead underwriters of the float.
If the company is unable to raise 500 billion yen worth in the bond sale, the remainder will be covered by subordinated loans made available through an earlier deal with domestic banks.