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Merck Places Hybrid Bond Amounting to €1.0 billion

Merck successfully places €1.0 billion hybrid bond in one tranche

Proactive refinancing of June 2021 hybrid bond redemption

Bond significantly oversubscribed

Merck, a leading science and technology company, today successfully placed a hybrid bond amounting to €1.0 billion. The placement has a maturity of 60 years with an early redemption option for Merck after six years and a coupon of 1.625 % payable annually. In addition to the new issue, Merck also announced a cash tender offer to repurchase an outstanding hybrid bond with an amount of up to €1.0 billion. This maturing hybrid bond has a first call date in June 2021.

“The early refinancing of the upcoming €1.0 billion hybrid redemption next year in combination with the tender offer is in line with our prudent financial policy. It also reinforces our commitment to hybrid capital as part of our toolkit to maintain a strong balance sheet,” said Marcus Kuhnert, Member of the Executive Board and Chief Financial Officer.

Receiving equity credit treatment from all three rating agencies Moody’s, Scope Ratings and Standard & Poor’s, the new hybrid bond, like the outstanding bond, supports Merck’s credit rating. The bond is equal in rank to the existing hybrid bonds and subordinated to all of Merck’s other existing financial liabilities.

The bond issued today achieved a well-diversified distribution among a wide range of institutional investors such as fund managers, insurance companies, pension funds, and banks and was significantly oversubscribed. Active bookrunners of the transaction were Barclays, BNP Paribas and Société Générale.

Merck is rated “A” (stable outlook) by Standard & Poor’s, “A–“ (stable outlook) by Scope and “Baa1” (stable outlook) by Moody’s.

Andreas Cezanne, logo Merck