GlaxoSmithKline has bucked the trend of economic uncertainty by raising a whopping $9 billion through a bonds issue.

The company originally issued $6 billion worth of bonds but that first tranche was heavily oversubscribed, so GSK added $2 billion to its five, 10 and 30-year bonds and a further $1 billion in floating rate two-year notes. The majority of the proceeds will go towards funding the company’s share repurchase programme.

Specifically they will be used to finance the remaining £8 billion of its £12 billion buy-back scheme which was announced a year ago and is expected to be completed by July 2009. The issues are expected to raise the firm’s net debt to £14 billion by then.

The scale at which investors have leapt on the GSK offering shows that high-quality stocks can still raise funds and comes at a time when firms, faced with reduced valuations on the markets and declining earnings, are looking to enhance their financial flexibility by diversifying their sources of funding.

New venture fund for GSK?
Meantime the In Vivo pharmaceutical blog has reported that GSK’s incoming chief executive Andrew Witty is looking to create a new venture fund that could have as much as $500 million at its disposal. The blog says that the new unit will make strategic investments outside the company to boosts its R&D efforts as well as to build start-ups around assets that GSK has deprioritised.

GSK already has such a fund, called SR One, which to date has invested $550 million in 125 companies, but the blog claims that the investments have not proved to be overly-productive.