This morning the news is full of Roche having sold $16 billion in a six-part bond issue in the USA to help finance its $42 billion hostile bid for the 44% stake in Genentech it does not already own.

The transaction was expected to raise some $10 billion but the issue was apparently heavily oversubscribed. The sale consisted of two floating-rate notes that mature between one and two years, and four fixed-rate tranches, with maturities from three to 30 years and may be one of the largest issues of its kind.

The huge deal shows that investors are still extremely keen to buy debt in high-quality firms and Roche fits the bill on that score. The Swiss major is rated AA- by Standard & Poor's and Aa1 by Moody's Investors Service.

Roche had previously said it plans to use a combination of its own funds, bonds, a commercial paper program and bank financing for the Genentech deal. After the USA sale, the firm is now expected to sell bonds in European debt markets.

Genentech has a wealth of cancer drugs in its portfolio and a rich pipeline acquired through early acquisitions and licensing deals that have netted over 100 drugs.

I wonder how Genentech feel about a hostile takeover by its Global partner?

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