Pfizer Inc., whose name could stand for Generic Drug Reaction, just raised $14 billion in the largest public debt offering ever, according to the Wall Street Journal.
The New York pharmaceutical giant, which has been experiencing a roller-coaster ride after its bribery scandal forced it to re-evaluate its deal with Allergan PLC and unlock billions in cash and liabilities through the restructuring, saw its stock rise on the news that it was paying off some of its massive debt by selling bonds. It’s paying an interest rate of 3.95 percent.
The announcement came just days after the company acquired an additional $4 billion in debt due to the restructuring of its deal with Allergan.
Pfizer said last week that it had raised $3.4 billion in the debt market. It expects to pay off the debt by 2024. The company reported net income for the second quarter of this year of $2.29 billion on revenue of $11.98 billion.
“We are pleased to complete the issuance and pricing of $14 billion of senior unsecured notes, which follows the $4 billion of debt that was issued in July,” Stephen Rotella, vice president of corporate development and investor relations at Pfizer, said in a statement. “This is another key step in our ongoing debt-reduction program and furthers our commitment to improving the returns on our investment in research and development.”
While Pfizer still has cash left, the company plans to use the proceeds from these bonds to pay off debt.
“Pfizer has long been an important brand-name pharmaceutical company, and we see value in the name’s high-quality portfolio, and in the franchise’s steady performance,” John Faucher, an analyst at JPMorgan Chase, said in a note to clients. “This picture is driven in part by the fact that the many patents related to important brands are coming off.”
Pfizer stock rose more than 6 percent to $35.69 on Wednesday morning.