Novartis AG sold $5.25 billion of bonds to pay down the bank loan behind its biggest recent acquisition, turning short-term deal financing into debt that stretches out more than a decade.
The Swiss drugmaker’s U.S. financing arm, Novartis Capital Corp., priced four tranches of senior notes, which the parent fully guarantees, according to a pricing term sheet filed with the Securities and Exchange Commission. The deal is scheduled to settle on Thursday. Proceeds will repay the $11 billion bridge loan used for the roughly $12 billion purchase of Avidity Biosciences, the RNA-therapy developer that Novartis completed buying in February.
Tranche by tranche
The three-year notes, $500 million due 2029, carry a 4.90% coupon and yield 4.956%, 35 basis points over Treasurys. Notes for $1.5 billion due 2032 pay 5.20% and yield 5.214%, 55 basis points over. The two largest pieces, $1.75 billion each, are notes due 2034 at 5.30%, yielding 5.397%, or 65 basis points over, and notes due 2037 at 5.50%, yielding 5.556%, or 70 basis points over. The notes are expected to be rated Aa3 by Moody’s and AA- by S&P. Barclays, BofA Securities, Goldman Sachs and SG Americas led a group of eight bookrunners.
Balance sheet after the deals
Novartis’s net debt rose to $37.4 billion at the end of September from $21.9 billion at the end of 2025, mainly because of acquisitions and dividends. The company still borrows at some of the tightest spreads in the corporate market, but the coupons show how far the base rate has moved. Its new 10-year debt pays more than the 5% the U.S. Treasury paid on 10-year notes this week, a reminder that even top-rated drugmakers now pay above 5% to term out deal debt.
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