china - CSL taps foreign debt markets for $1.2b

Blood products giant CSL has joined the growing list of corporates shoring up their cash reserves, securing an additional $US750 million ($1.17 billion) in debt from offshore investors, spread over four maturities.

The company, which on Wednesday announced it was commencing production of a therapy for COVID-19 using the antibodies from the plasma of recovered patients, raised the debt via a private placement.

CSL chief financial officer David Lamont said the raising had been oversubscribed from investors.

"The US private placement market continues to provide CSL with good flexibility in terms of maturities and we are grateful for the ongoing support of this important debt market," he said.

"The transaction is a continuation of the company’s strategy to strengthen its debt maturity profile."

The deal is further proof that there is hunger for Australian issuers, even with record volumes of deals into US and European bond markets.

The $US750 million secured by CSL is split over four time periods, with the first amount — $US100 million — due to be repaid after seven years.

At the 10-year mark CSL must repay $US300 million, while 12 years from now the business will owe $US150 million. In 15 years it will have to pay back a further $US200 million.

The new private placement has an average life of 11.5 years and a weighted average interest rate of 2.68 per cent.

CSL shares were trading up less than 1 per cent on Thursday morning at $309.06, giving it a market capitalisation of $140 billion.

The debt issue is still subject to investor due diligence and is scheduled to close in late May.

Fellow ASX-listed healthcare giant Cochlear tapped debt markets as part of its recent capital raising, extending its line of credit with an existing lender by $150 million.

Toll road company Transurban tapped international debt markets recently, raising more than $1 billion (€600 million) from offshore bond markets. Unlike CSL, which has been relatively unscathed from the COVID-19 pandemic, Transurban's raise came during a substantial drop off in business.

Qantas has  successfully raised more than $1 billion of debt since the COVID-19 outbreak, through a consortium of domestic and international banks. It was secured against seven of the airline's aircraft.

Now in a daily tussle with BHP (which is dual listed) to be the most valuable company on the ASX, CSL has upped its efforts in the fight against COVID-19 in the last five weeks.

As well as commencing local production of a hyperimmune therapy to treat critically ill COVID-19 patients, it has also joined forces with its Japanese rival Takeda and a handful of other international biotechs to work together to create an unbranded therapy.

While collections of plasma from recovered COVID-19 patients is due to begin on Monday, CSL is also working in the US and Europe with the alliance to stockpile donations and start clinical trials.