Several days after Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) was upgrade by ratings agency Moody's, the Israeli company has begun recycling its debt. The move, which was expected, given the high amounts it needs to repay over the next two years, will include raising new debt worth $2 billion, to repay holders of bond series due to mature in 2026 and 2027.
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These are dollar bonds bear an interest rate of 3.15%, and several other series of bonds linked to existing targets in dollars and euros, which Teva issued several years ago as part of a previous debt cycle, have rates ranging from 3.75%-8.125%, and are scheduled to mature between 2027 and 2031. Teva will hold a tender to purchase the bonds from the holders, with the bulk of the amount being allocated to the bond series scheduled to mature in 2027.
Moody's last week raised Teva's debt rating from Ba2 to Ba1, which is already approaching investment grade, with a positive outlook.
Teva's debt at the end of the first quarter of 2025 was $16.7 billion (net debt of $15 billion), after the company repaid $1.4 billion in debt during the quarter. In 2026, Teva is required to repay $3.4 billion in debt, part of which it is now recycling, and in 2027 the amount is $2.9 billion.
Teva took on most of its debt when it financed the $40 billion acquisition of Actavis from Allergan in 2016 – a deal that in retrospect turned out to be expensive and nowhere near as successful as Teva had anticipated.
Published by Globes, Israel business news – en.globes.co.il – on May 18, 2025.
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