Actavis Plc (NYSE:ACT) and Its Record-Breaking $21 Billion Bond Sale


Actavis Plc (NYSE:ACT) has the honor of culminating the second-largest corporate bond and made a record making sale on Tuesday.  An immense number of sales were made of $21 billion bonds, by an increasing number of investors who couldn’t wait to get their hands on them. This was also because these investments had a promise of better returns in them, in contrast to Treasury bond yields which couldn’t guarantee very profitable returns.

This huge sale carried out by Actavis Plc (NYSE:ACT) has contributed in further enhancing the debt incurred by investment-grade companies. Dealogic has compiled a report in this regard, which states that huge sales of bonds have been carried out and this trend hasn’t been observed in the market since the year 2009. Furthermore, the figure of the bond sales, as set forth by the company, stood at $203 billion.

Actavis Plc (NYSE:ACT) has also mapped out its future plans and hopes to utilize the income of these bond sales to financially back up its acquisition project of Allergan Inc. (NYSE:AGN). This project needs a total funding of $66 billion. The Chief Executive Officer and President of Actavis Plc (NYSE:ACT), Brent Saunders, explains the reasons in work behind this acquisition project. He stated that the aim of this acquisition plan is to end up with a pharmaceutical company which is renowned for its dynamic nature, innovative technology and rapid progress, across the globe. Moreover, Actavis Plc (NYSE:ACT) shall be then ranked amongst the world’s top 10 health care and pharmaceutical companies.

The company experienced an intensely high demand for its bonds which is reflected in its $21 billion bond sale. Investors placed orders of almost $90 billion, which made their way into Actavis Plc’s (NYSE:ACT) revenue. As a consequence of this high demand, bond-selling banks were compelled to lower yields. Trading session took place on Tuesday and the mighty presence of this strong demand were also felt there, since the stock prices escalated.

US treasury bonds’ low yields was the pivotal factor in play which led to the ultimate escalation of this demand. European investors and other investors present overseas showed a particular interest and were the major partakers of this strong demand. This is probably because of the economic downfall as well as the yields of European Treasury bonds which are going downhill. European Central Bank, in this regard, has initiated a stimulation program. The major aim of this program is to further lower the yields on these bonds.

This $21 billion bond-deal finalized by Actavis Plc (NYSE:ACT) has proved to be extremely profitable for the company and bestowed it with a higher ranking, in contrast to Microsoft Corporation (NASDAQ:MSFT). Microsoft Corporation’s (NASDAQ:MSFT) bond deal amounted to almost $10.75 billion; and before Tuesday’s record-breaking deal, this was considered to be the largest bond deal of investment-grade. Actavis Plc (NYSE:ACT) not only outstepped Microsoft Corporation (NASDAQ:MSFT), rather the bond sale by Exxon Mobil Corporation (NYSE:XOM) was also left behind; since in comparison with Actavis Plc’s (NYSE:ACT) $21 billion bond deal, its $7 billion did not amount to much.


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