The pharmaceutical giant has raised no less than 2.2 billion francs in five tranches.
For the first time in almost ten years, Novartis is looking for new money on the Swiss bond market. The pharmaceutical giant has raised no less than 2.2 billion francs in five tranches.
The Rhineland multinational thus signs the largest transaction of the year on the primary market and is among the largest issues carried out in one go, a broker commented on Tuesday.
In detail, Novartis has raised 650 million due in 2027, 435 million for 2031 and 645 million for 2034. To this must be added 280 million for 2040 and 190 million for 2049. These loans were raised under the management of UBS, of BNP Paribas, Deutsche Bank and Zurich Cantonal Bank.
The demand was there. Such a large volume was able to be raised due to attractive risk premiums and new issue premiums. Swap spreads range from +33 basis points (bps) over the short term to +50 bps over the long term. Yields run from +1.55% to +1.84%.
This is also Novartis’ first loan since February 2015. The group then raised 1.375 billion in three tranches, one of which will mature next year. The other two have a deadline of 2029 and 2035 respectively.
Added to this is the fact that these are repo bonds. In other words, they can be used for transactions with the Swiss National Bank (SNB). “A bond rated AA can also be purchased by both an individual investor and an institutional investor,” comments a broker.
