{"id":9688,"date":"2023-05-16T22:28:44","date_gmt":"2023-05-17T02:28:44","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/pfizer-borrows-31-billion-in-mega-bond-deal-as-debt-issuance-picks-up-ahead-of-debt-ceiling-deadline\/"},"modified":"2023-05-16T22:28:45","modified_gmt":"2023-05-17T02:28:45","slug":"pfizer-borrows-31-billion-in-mega-bond-deal-as-debt-issuance-picks-up-ahead-of-debt-ceiling-deadline","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=9688","title":{"rendered":"Pfizer borrows $31 billion in mega bond deal as debt issuance picks up ahead of debt-ceiling deadline"},"content":{"rendered":"
\n

Pharmaceutical giant Pfizer secured $31 billion in financing on Tuesday, as companies pick up the pace of borrowing ahead of potential market turmoil tied to the U.S. debt-ceiling fight.<\/p>\n

Pfizer
\n PFE,
\n -0.40%<\/bg-quote>
\n borrowed the funds via an eight-tranche bond deal that will go toward its roughly $43 billion acquisition of Seagan, a biotech focused on creating therapies to treat cancer, according to public documents tied to the financing.<\/p>\n

\n

Pricing on the bonds, rated A1 by Moody\u2019s Investors Service, narrowed about 20 basis points from initial expectations, with the $5 billion class of 10-year bonds clearing at a spread of 125 basis points above the risk-free Treasury rate
\n TMUBMUSD10Y,
\n 3.529%<\/bg-quote>,<\/span>
\n or a yield of about 4.7%, according to a person with direct knowledge of the dealings. <\/p>\n

Bankers initially pitched the bonds to investors at a range of Treasurys plus 145 basis points, according to CreditSights. Lower spreads mean investors receive less compensation.<\/p>\n

The bond deal ranks as the fourth-largest on record for the U.S. investment-grade corporate bond market, according to data from Informa Global Markets.<\/p>\n

Analysts at BofA Global this week noted an uptick in U.S. investment-grade corporate bond supply, with issuance in May (see chart) already exceeding the $69 billion priced in April.<\/p>\n

<\/p>\n
<\/p>\n<\/figure><\/div>\n

While the chart doesn\u2019t include Tuesday\u2019s mega financing for Pfizer, it does show the dramatic drop in issuance volume in March from a year ago, when the Federal Reserve began to quickly raise rates from nearly zero. It also shows May issuance increased from a month before.<\/p>\n

\u201cThe acceleration this week could be, at least in part, due to the upcoming U.S. debt-limit X-date in early June,\u201d a team of BofA Global researchers, led by Yuri Seliger, wrote in a recent client note.<\/p>\n

Pfizer didn\u2019t immediately respond to a request for comment. Its shares closed 0.4% lower Tuesday. <\/p>\n

Treasury Secretary Janet Yellen in early May said the U.S. could be unable to pay all of its bills by June 1, a warning she repeated earlier this week.<\/p>\n

After a second round of debt-ceiling talks between President Joe Biden and congressional leaders Tuesday, House Speaker Kevin McCarthy said disagreements remain but that a deal might be possible by the end of the week. <\/p>\n

See:<\/strong> McCarthy says second debt-ceiling meeting was \u2018a little more productive,\u2019 while Biden says he\u2019s optimistic<\/p>\n

Stocks closed lower on Tuesday, with the Dow Jones Industrial Average
\n DJIA,
\n -1.01%<\/bg-quote>
\n closing 336 points, or 1%, lower, while the S&P 500 index
\n SPX,
\n -0.64%<\/bg-quote>
\n fell 0.6 and the Nasdaq Composite Index
\n COMP,
\n -0.18%<\/bg-quote>
\n shed 0.2%.<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Pharmaceutical giant Pfizer secured $31 billion in financing on Tuesday, as companies pick up the pace of borrowing ahead of potential market turmoil tied to the U.S. debt-ceiling fight. Pfizer PFE, -0.40% borrowed the funds via an eight-tranche bond deal that will go toward its roughly $43 billion acquisition of Seagan, a biotech focused on […]<\/p>\n","protected":false},"author":1,"featured_media":9689,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-9688","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nPfizer borrows $31 billion in mega bond deal as debt issuance picks up ahead of debt-ceiling deadline | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Pharmaceutical giant Pfizer secured $31 billion in financing on Tuesday, as companies pick up the pace of borrowing ahead of potential market turmoil tied\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" 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