CVS gives pricing, early results of tender offers for 2023, 2025 notes

By Taylor Fox

New York, Aug. 26 – CVS Health Corp. announced the early results and pricing of its cash tender offers for up to $3 billion of notes due 2023 from three series, including one issued by wholly owned subsidiary Aetna Inc., and up to $3 billion of notes due 2025 from two series, according to two press releases issued Wednesday.

CVS received tenders for the following under the 2023 offers, listed in order of acceptance priority level:

• $722,809,000 of the $1.25 billion outstanding 4% senior notes due 2023 (Cusip: 126650CC2) issued by CVS, with pricing set at $1,108.36 per $1,000 of notes, based on the 0.125% U.S. Treasury due July 15, 2023 and a fixed spread of 20 basis points;

• $4,008,643,000 of the $6 billion outstanding 3.7% senior notes due 2023 (Cusip: 126650CV0) issued by CVS, with pricing set at $1,079.36 per $1,000 of notes, based on the 0.125% U.S. Treasury due July 15, 2023 and a fixed spread of 25 bps; and

• $942,532,000 of the $1.3 billion outstanding 2.8% senior notes due 2023 (Cusip: 00817YAV0) issued by Aetna. Pricing for this series was to be based on the 0.125% U.S. Treasury due July 15, 2023 and a fixed spread of 25 bps, but was not announced because none of these tenders were accepted.

CVS received tenders for the following under the 2025 offers, with the notes listed in order of acceptance priority level:

• $3,951,753,000 of the $5 billion outstanding 4.1% senior notes due 2025 (Cusip: 126650CW8) issued by CVS, with pricing set at $1,148.89 per $1,000 of notes, based on the 0.25% U.S. Treasury due July 31, 2025 and a fixed spread of 36 bps; and

• $1,434,282,000 of the $2,828,067,000 outstanding 3.875% senior notes due 2025 (Cusip: 126650CL2) issued by CVS. Pricing for this series was to be based on the 0.25% U.S. Treasury due July 31, 2025 and a fixed spread of 43 bps, but was not announced because none of these tenders were accepted.

Because the aggregate principal amount of 2023 notes validly tendered would exceed the 2023 notes’ cap, CVS expects that it will accept $2,277,191,000 of validly tendered 3.7% senior notes due 2023 on a prorated basis and none of the validly tendered 2.8% senior notes due 2023.

Likewise, since the aggregate principal amount of 2025 notes validly tendered would exceed the 2025 notes’ cap, CVS Health expects that it will accept $2,999,994,000 of validly tendered 4.1% senior notes due 2025 on a prorated basis and none of the validly tendered 3.875% senior notes due 2025.

As previously reported, the total consideration includes an early tender payment of $30 per $1,000 principal amount of notes tendered by 5 p.m. ET on Aug. 25, the early tender date.

Since CVS expects to accept for purchase the maximum aggregate amount of notes, no additional notes will be purchased under the offers after the early settlement date.

Previously, holders tendering after the early deadline would have only been eligible to receive the tender offer consideration, which was the total consideration less the early tender payment.

Holders will also receive accrued interest to but excluding the applicable settlement date.

The settlement date for early tendered notes is expected to be Aug. 27.

Barclays (800 438-3242 or 212 528-7581), Goldman Sachs & Co. LLC (800 828-3182 or 212 902-6351) and J.P. Morgan Securities LLC (866 834-4666 or 212 834-8553) are dealer managers for the tender offers.

D.F. King & Co., Inc. (cvs@dfking.com, 212 269-5550 for banks and brokers only or 800 714-3305 for all others) is the tender and information agent.

The health care company is based in Woonsocket, R.I.

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