Zoetis Inc. intends to strengthen its cash reserves and retire costlier debt by issuing $1.25 billion worth of corporate bonds.
The world’s largest manufacturer of animal drugs and vaccines reported May 7 that the company expects to sell $750 million in senior notes at 2% interest and an additional $500 million at 3%. The first bonds would come due in 2030 and the second in 2050.
“In light of the favorable financing rates and uncertainties surrounding the COVID-19 pandemic, the management team determined it was prudent to secure additional liquidity now,” Zoetis Vice President Bill Price said.
Zoetis held about $2 billion in cash and cash equivalents at the end of the first quarter, he said.
Of the $1.25 billion in new debt, Zoetis will use $500 million to repay the principal on senior notes that carry an interest rate of 3.45% and mature in November 2020.
The offering is expected to close May 12, Zoetis reported.
Barclays Capital Inc., BofA Securities, Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC and MUFG Securities Americas Inc. are acting as joint book-running managers of the underwriters.
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