CSL share price leaping higher amid $1.9 billion funding news

ASX 200 investors are bidding up the CSL share price on Wednesday.

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The CSL Ltd (ASX: CSL) share price is charging higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) biotech stock closed yesterday trading for $282.47. In morning trade on Wednesday, shares are swapping hands for $286.33, up 1.4%.

For some context, the ASX 200 is just about flat at this same time.

Investors may be bidding up the CSL share price after the company announced it has issued a pair of long-dated bonds totalling US$1.25 billion (AU$1.91 billion).

CSL share price lifts on refinancing news

According to the release, the corporate bonds will be issued by CSL Finance Plc and guaranteed by the parent company, CSL Limited, and some of its subsidiaries.

The principal amount, tenor and coupon for the notes are:

  • US$500 million, 10-year at a fixed rate coupon of 5.106%
  • US$750 million, 30-year at a fixed rate coupon of 5.417%

The CSL share price could be catching some tailwinds on the news, as the company will use some of the AU$1.9 billion in new funds to refinance higher interest existing bank debt. Management said the rest of the funds will be used "for general corporate purposes".

CSL expects settlement to occur next Wednesday, 3 April, subject to customary closing conditions.

What's been happening with the ASX 200 biotech stock?

CSL reported its half-year results on 13 February.

Highlights included an 11% year on year increase in revenue (in constant currency terms) to US$8.05 billion.

And net profit after tax in constant currency was up 20% to US$1.94 billion.

Despite those strong results, the CSL share price closed down 2.8% on the day.

Investors may have been a bit jittery about the 32% year on year increase in net finance costs, which came in at US$234 million. The increase was driven by debt taken on in the company's acquisition of Vifor Pharma alongside higher interest rates.

However, the ASX 200 biotech's balance sheet looks solid, with net assets of US$19.16 billion.

The CSL share price has had a strong run recently, up 14% in six months.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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