Novo gets 15 billion euros of orders for Akero acquisition bonds

[NEW YORK] Novo Nordisk has pulled in more than 15 billion euros (S$22.6 billion) of investor orders for its multi-tranche bond sale, more than triple the amount the Danish drugmaker is seeking for its planned purchase of US biotech Akero Therapeutics.

The company is looking to sell 3.4 billion euros to 4 billion euros of debt stretching from two to 20 years, according to a person familiar with the deal. Proceeds will go toward general corporate purposes, including the acquisition of Akero, which Novo agreed to buy for as much as US$5.2 billion to expand its treatments for liver disease linked to obesity.

It’s the latest in a flurry of bond sales to fund mergers and acquisitions in Europe in recent weeks, as dealmaking heads for one of its busiest-ever years. L’Oreal sold 3 billion euros of debt on Wednesday, with some of the proceeds to go toward financing its acquisition of Kering Beauté.

Novo chief executive officer Mike Doustdar has been pushing to rebuild momentum in the company’s pipeline following intense competition in the weight-loss drug market. The Akero deal adds an experimental therapy for Mash – a severe liver condition associated with obesity – and underscores Novo’s drive to strengthen its portfolio beyond blockbuster products like the obesity shot Wegovy.

The company is selling debt in six tranches. The shortest maturity, a two-year floating rate note, was tightened to being offered at 20 basis points over Euribor, while the longest, 20-year bonds, are now marketed at around 115 basis points over mid-swaps from 150-155 basis points over.

The bonds, expected to be rated Aa3 by Moody’s and AA by S&P, are being issued through Novo Nordisk Finance Netherlands and are backed by the parent company. BLOOMBERG