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Japan-Based Takeda's U.S. Dollar-Denominated Unsecured Notes Rated 'BBB+'

    TOKYO (S&P Global Ratings) June 28, 2024--S&P Global Ratings today said it has assigned its 'BBB+' long-term issue credit rating to Takeda Pharmaceutical Co. Ltd.'s (BBB+/Stable/A-2) unsecured notes.

    The issue credit rating is equivalent to our long-term issuer credit rating on Takeda, a Japan-based pharmaceutical company. This is because given the priority of payment of the notes among Takeda's financial obligations, we see a limited possibility of the noteholders being significantly disadvantaged relative to other lenders, including lenders to its subsidiaries.

    The notes have minimal impact on Takeda's credit quality, even though the total issuance is large. This is because the entire amount to be raised through the notes will be used to refinance existing interest-bearing debt. In our view, the notes will help diversify and extend the maturities of Takeda's debt.

    Our rating on Takeda mainly reflects its business strengths including its strong business position in branded pharmaceuticals, diversified product portfolio, and enhanced late-stage development pipeline.

    On the other hand, we expect key measures of Takeda's cash flow to remain slightly weak for the rating on the company. We estimate that at the end of March 2024 the company's debt-to-EBITDA ratio had deteriorated to slightly above 4x, the threshold for considering a downgrade, due mainly to lower revenues from loss of exclusivity (LOE) of patents on some major drugs, expenditures to strengthen its development pipeline, and the effects on debt of yen depreciation. The ratio was 3.3x at the end of March 2023. Although the company is working to restore profitability and financial strength through business restructuring, we expect the ratio may remain slightly above 4x at the end of fiscal 2024 (ending March 31, 2025) due to remaining impact of the LOE during the fiscal year.

    Related Criteria

    Ratings List

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    $1,100 million; 10 years; due July 5, 2034; 5.300%


    $800 million; 20 years; due July 5, 2044; 5.650%


    $600 million; 30 years; due July 5, 2054; 5.650%


    $500 million; 40 years; due July 5, 2064; 5.800%


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