FILE PHOTO: Logo of global biopharmaceutical company Bristol-Myers Squibb is pictured at the headquarters in Le Passage, near Agen, France March 29, 2018. REUTERS/Regis Duvignau

NEW YORK (Reuters) - The cost to insure Bristol-Myers Squibb BMY.N debt hit its highest point since May 2010 on Thursday, following the announcement that the U.S. pharmaceutical company would acquire rival Celgene Corp CELG.O in a deal worth about $74 billion.

As the price of long-dated Bristol-Myers bonds fell, the associated credit default swap BMY5YUSAX=MG jumped 66 percent, bringing the cost to insure $1 million of the company's debt to $23,000. The moves happened because a portion of the acquisition will be funded by debt, raising the investment-grade company's credit risk. Bristol-Myers is currently rated A+ by S&P Global Ratings and A2 by Moody's Investors Service.

The $74-billion deal, worth $90 billion with Celgene’s debt incorporated, is the largest healthcare acquisition on record, and will be financed in part by a $33.5-billion bridge loan, the second largest ever U.S. healthcare bridge loan, according to Refinitiv data.

Bristol-Myers “will be coming to market later this year to fund the deal with about $28 billion of new debt,” a significant addition to its current debt load of $7.3 billion, said Monica Erickson, portfolio manager at DoubleLine Group.

The new debt would push the merged company’s leverage from 1.8 times earnings before interest, tax, depreciation and amortization to 3.5 times, said Erickson.

As Bristol-Myers added, Celgene shed credit risk. Celgene is currently rated BBB+/Baa2, two notches above junk status.

“It’s good for Celgene bond holders, but not so good for Bristol-Myers bonds holders,” said Erickson.

Celgene's longer-dated bonds rose, particularly for issues with the full amount borrowed still outstanding. A $2 billion bond coming due in 2045 151020AU8= was up 6.6 percent, and the company's $1.5 billion 2048 bond 151020AZ7= rose 6.3 percent.