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Bayer conducted an investor call on Monday in response to a series of negative developments that raised concerns among bondholders about the transparency of the company’s prospects before a recent $5.75 billion bond issuance, according to three sources familiar with the matter. Some bond investors raised questions about whether Bayer should revise the deal’s terms or withdraw it altogether following setbacks in drug development and legal issues related to its Roundup weed-killer.
The company’s bankers held a call with top investors on Monday to address concerns and provide clarity on the potential impact of the recent news on the company’s earnings. The call reassured investors that the company had reserves to handle Roundup litigation and could not have foreseen the recent legal verdicts.
While it is uncommon for investment-grade bonds to be withdrawn after pricing, the recent events have widened credit spreads on some of Bayer’s bonds. Despite the challenges, Bayer’s bond issuance was the 10th largest investment-grade deal by an industrial company this year, attracting over $22 billion in orders. Citigroup, JP Morgan, SMBC Nikko Securities America, and Wells Fargo were the bookrunners for the deal.
