By Andrea Heisinger
New York, June 22 - Merck & Co. priced an upsized $4.25 billion notes (Aa3/AA-/AA-) in four tranches Monday, an informed source said.
Initially, the deal size was $3.5 billion.
The $1.25 billion of 1.875% two-year notes priced at 99.976 to yield 1.887%, or Treasuries plus 75 basis points. The notes were talked in the 87.5 bps area and have a make-whole call at Treasuries plus 10 bps.
The $1 billion of 4% six-year notes priced at 99.598 to yield 4.076%, or Treasuries plus 137.5 bps, with talk in the 150 bps area.
A $1.25 billion tranche of 5% 10-year notes priced at 99.369 to yield 5.081%, or Treasuries plus 140 bps. This was at the tight end of talk in the 150 bps area.
The final tranche was $750 million of 5.85% 30-year notes priced at 99.802 to yield 5.864%, or Treasuries plus 145 bps. This was tighter than guidance of 155 to 160 bps.
The six-, 10- and 30-year tranches each have a make-whole call at Treasuries plus 20 bps.
Guidance for all of the tranches had a margin of plus or minus 12.5 bps.
Bookrunners were Banc of America Securities LLC, Citigroup Global Markets Inc., J.P. Morgan Securities Inc. and RBS Securities Inc.
Co-managers were BNP Paribas Securities Corp., Credit Suisse Securities, HSBC Securities (USA) Inc., Santander Securities and UBS Investment Bank.
Proceeds will be used to help finance a portion of the cash consideration for the merger with Schering-Plough Corp. The cash consideration totals $18.4 billion.
The pharmaceutical company is based in Whitehouse Station, N.J.
| Issuer: | Merck & Co.
|
| Issue: | Notes
|
| Total amount: | $4.25 billion, increased from $3.5 billion
|
| Bookrunners: | Banc of America Securities LLC, Citigroup Global Markets Inc., J.P. Morgan Securities Inc., RBS Securities Inc.
|
| Co-managers: | BNP Paribas Securities Corp., Credit Suisse Securities, HSBC Securities (USA) Inc., Santander Securities, UBS Investment Bank
|
| Trade date: | June 22
|
| Settlement date: | June 25
|
| Ratings: | Moody's: Aa3
|
| Standard & Poor's: AA-
|
| Fitch: AA-
|
|
|
| Two-year notes
|
| Amount: | $1.25 billion
|
| Maturity: | June 30, 2011
|
| Coupon: | 1.875%
|
| Price: | 99.976
|
| Yield: | 1.887%
|
| Spread: | Treasuries plus 75 bps
|
| Call: | Make-whole at Treasuries plus 10 bps
|
| Price talk: | 87.5 bps area
|
|
|
| Six-year notes
|
| Amount: | $1 billion
|
| Maturity: | June 30, 2015
|
| Coupon: | 4%
|
| Price: | 99.598
|
| Yield: | 4.076%
|
| Spread: | Treasuries plus 137.5 bps
|
| Call: | Make-whole at Treasuries plus 20 bps
|
| Price talk: | 150 bps area
|
|
|
| 10-year notes
|
| Amount: | $1.25 billion
|
| Maturity: | June 30, 2019
|
| Coupon: | 5%
|
| Price: | 99.369
|
| Yield: | 5.081%
|
| Spread: | 140 bps
|
| Call: | Make-whole at Treasuries plus 20 bps
|
| Price talk: | 150 bps area
|
|
|
| 30-year notes
|
| Amount: | $750 million
|
| Maturity: | June 30, 2039
|
| Coupon: | 5.85%
|
| Price: | 99.802
|
| Yield: | 5.864%
|
| Spread: | Treasuries plus 145 bps
|
| Call: | Make-whole at Treasuries plus 20 bps
|
| Price talk: | 155 to 160 bps
|
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