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UPDATE 1-Mylan calls off plan for debut euro bond

(Adds market data and comments)

By Laura Benitez

LONDON, Sept 14 (IFR) - Pharmaceuticals company Mylan decided not to proceed with a proposed debut euro-denominated bond on Wednesday as it comes under further scrutiny for sharply raising the price of its EpiPen allergy auto-injector.

The US company met investors from September 7-9 for a potential euro benchmark multi-tranche debut offering, rumoured to be around 3bn in size.

"They certainly had more than enough demand. I think it was more that their US dollar spreads had been under pressure recently and they didn't feel like they wanted to validate the levels by printing there," a banker said.

Heather Bresch, the company's chief executive, will appear at a congressional hearing on September 21 over price increases for its EpiPen, the US House of Representatives Oversight Committee said in a statement on Wednesday.

The price of its EpiPens, which are carried by people with life-threatening allergies, has risen from about US$100 in 2008 to around US$600.

"The market is pretty soft but deals are still getting done. Mylan probably wanted to achieve pretty aggressive pricing and realised the market isn't there," one investor said.

The European bond market has started to sag under the weight of primary issuance, and that coupled with a rates sell-off has seen investors take more of a defensive tack.

The iBoxx non-financials index has widened 5bp over the last week to touch swaps plus 70bp as of last night's close, a level not seen since mid July.

In a message from the leads, Mylan said it will continue to monitor the euro market and "has a desire to enter the European debt capital markets at some point in the future".

The US-headquartered company, rated Baa3/BBB-/BBB-, had hired Deutsche Bank, Citigroup, ING and JP Morgan to arrange the European roadshow. (Reporting By Laura Benitez, editing by Sudip Roy, Julian Baker)

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