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Takeda invites banks to join $31 billion loan for Shire deal

Bloomberg

Takeda Pharmaceutical Co. has invited Japanese and overseas banks to participate in the syndication of the $30.85 billion (¥3.362 trillion) loan to back its $62 billion purchase of Shire Plc, according to people familiar with the matter.

The move comes after the Japanese pharma giant said earlier this month it had reached an agreement on the bridge loan with JPMorgan Chase, MUFG Bank and Sumitomo Mitsui Banking Corp. The syndication gives more lenders an opportunity to get in on one of the biggest-ever loans in Asia, which has helped drive up the average loan size for high-grade acquisitions worldwide this year.

Still, lending to Takeda for the blockbuster acquisition isn’t without risks. Moody’s Investors Service cut the company’s debt rating by one notch to A2 earlier this month, calling the scale of Takeda’s deal to buy larger rival Shire “extraordinary.” Takeda is also reportedly contemplating issuing up to about $20 billion of bonds in fiscal 2018 to help fund the acquisition, which would be the biggest-ever outbound acquisition by a Japanese firm if it goes through.

The loan offers an interest margin and a commitment fee based on the company’s rating, according to the people, who asked not to be identified because they aren’t authorized to speak publicly. Lenders need to commit at least about $500 million to join the financing, they said.

Takeda’s spokesman declined to comment.