Teva Pharmaceutical Industries Ltd., Peabody Energy Corp. and Amgen Inc. are among companies leading at least $19.8 billion of corporate bond offerings as yields on the debt fall.
Teva, the world’s largest generic drugmaker, plans to issues $5 billion of notes, according to a person with knowledge of the transaction who declined to be identified because terms aren’t set. Amgen, the biggest biotechnology company, is offering $6 billion to finance a $5 billion share repurchase program and Peabody Energy Corp., the largest U.S. coal producer, may sell $2.75 billion in high-yield debt, according to people familiar with the transactions.
Companies are taking advantage of falling borrowing costs as investors gain confidence in the U.S. economy to withstand Europe’s sovereign debt crisis. Gross domestic product grew in the third quarter at the fastest pace in a year as Americans reduced savings to boost purchases and companies stepped up investment in equipment and software. The average yield on junk bonds fell to 8.57 percent on Nov. 4, down from 10.19 percent a month earlier, according to Bank of America Merrill Lynch index data.
Teva’s transaction includes floating-rate notes due in 18 months and two years as well as three-, five- and 10-year fixed-rate debt, said the person, who declined to be identified because terms aren’t set. The Petach Tikva, Israel-based company is raising the money to help finance its purchase of Cephalon Inc., the person said.
WPX, UnitedHealth Sales
Proceeds of St. Louis-based Peabody’s offering, which may be rated a step below investment-grade by Moody’s Investors Service and Standard & Poor’s, will be used to pay for the acquisition of MacArthur Coal Ltd., said a person familiar with that transaction, who declined to be identified because terms aren’t set.
Amgen is selling three-, 5-, 10- and 30-year debt and will use the money to pay for the stock buyback, it said in a Securities and Exchange Commission filing, that didn’t specify the size of the sale.
WPX Energy Inc., UnitedHealth Group Inc., Zimmer Holdings Inc. and Dr. Pepper Snapple Group Inc. are also planning debt sales, according to people familiar with the companies’ plans.