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Takeda to float 7.5bn euros in bonds to fund Shire purchase

$5.5bn bond issuance also in the works as company refinances short-term debt

Takeda's Shire purchase is the most expensive acquisition by a Japanese company.   © Reuters

TOKYO -- Takeda Pharmaceutical is set to issue 7.5 billion euros ($8.55 billion) of bonds next week to help pay for the $62 billion purchase of Irish drugmaker Shire.

The Japanese company announced on Friday the terms of the bond issuance. Six tranches with maturities of two, four, eight and 12 years will be issued this coming Wednesday. Coupon rates will be 2.25% for the eight-year bonds and 3% for the 12-year bonds.

Takeda has credit ratings of A- from S&P Global and A2 from Moody's Investors Service. The bonds will be sold to investors in Europe, the U.S. and greater Asia.

The company also announced the same day plans to issue what is expected to be around $5.5 billion in dollar-denominated bonds, with maturities of two, three, five and 10 years. Terms of issuance will be hammered out after gauging demand from investors.

Takeda is financing the Shire purchase through cash and equity. To raise about $30 billion for the cash payment, the company secured in May $30.8 billion in short-term bridge lending from three parties including JPMorgan Chase and Sumitomo Mitsui Banking Corp.

To turn the short-term debt into longer-term debt, Takeda signed a deal to raise up to 500 billion yen ($4.4 billion) in subordinated loans from parties including MUFG Bank and Mizuho Bank.

The share issuance plan for the equity portion of the deal is expected to be approved by Takeda shareholders Dec. 5, and the Shire purchase could close as early as Jan. 8.

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