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26 June 2020 by lberuti

TACHEM ( Takeda Pharmaceutical ) goes back to 1781 when its predecessor began selling traditional Japanese and Chinese remedies. Today, TACHEM is one of the largest pharmaceutical companies. It makes branded prescription drugs that it sells all over the world. At the beginning of 2019, it roughly doubled its size with the $62Bln acquisition of UK-based Shire Plc. It contributed to the accumulation of a $48bln debt pile that mostly matures before 2030. The company announced today its intention to issue bond in USD and Euros in a multiple tranches transaction to extend existing debt maturities. The Japanese drug maker intends to offer 4 euro notes maturing in as many as 20 years, and 4 dollar bonds as long as 40 years. On the back of aggressive Central banks’ intervention, credit risk premia across the board have come a long way since their March widest levels. TACHEM’s is no exception and it was actually trading earlier this week very close to its tightest level ever. The plan will be a test of investors’ appetite as predicting drugmakers’ prospects is notoriously challenging over multiple decades. In anticipation on the deals, the market pushed TACHEM’s 5-year CDS off yesterday’s level and it closed 16bps wider at 47bps.