CVS ups tender offer on six series to $4.5 billion, gives early results

By Taylor Fox

New York, Dec. 21 – CVS Health Corp. announced the early results of and an amendment to its cash tender offers for notes from six series due 2023, 2025 and 2028, including one 2023 series issued by wholly owned subsidiary Aetna Inc., according to a news release.

CVS increased the maximum amount of the offer to $4.5 billion from $4 billion.

Specifically, CVS will accept for purchase up to $1.5 billion of notes from three series due 2023; up to $1,049,919,000 of notes from two series due 2025, increased from $1 billion; and up to $1,950,081,000 of notes from a series due 2028, increased from $1.5 billion.

2023 note offers

As of 5 p.m. ET Dec. 18, the early tender deadline, CVS received tenders for the following 2023 notes, listed by acceptance priority level:

• $113,284,000 of the $527,191,000 outstanding 4% senior notes due 2023 (Cusip: 126650CC2), all of which are expected to be accepted for purchase, with pricing based on the 0.25% U.S. Treasury due Nov. 15, 2023 and a fixed spread of 20 basis points;

• $2,027,582,000 of the $3,722,809,000 outstanding 3.7% senior notes due 2023 (Cusip: 126650CV0), $1,386,716,000 of which are expected to be accepted, with pricing based on the 0.25% U.S. Treasury due Nov. 15, 2023 and a fixed spread of 20 bps; and

• $711,112,000 of the $1.3 billion outstanding 2.8% senior notes due 2023 (Cusip: 00817YAV0) issued by Aetna, none of which are expected to be accepted. Pricing was to be based on the 0.25% U.S. Treasury due Nov. 15, 2023 and a fixed spread of 28 bps.

2025 note offers

As of the early tender deadline, CVS received tenders for the following 2025 notes, listed by acceptance priority level:

• $1,049,919,000 of the $2,000,006,000 outstanding 4.1% senior notes due 2025 (Cusip: 126650CW8), all of which are expected to be accepted for purchase, with pricing based on the 0.375% U.S. Treasury due Nov. 30, 2025 and a fixed spread of 34 bps; and

• $924,598,000 of the $2,828,067,000 outstanding 3.875% senior notes due 2025 (Cusip: 126650CL2), none of which are expected to be accepted. Pricing was to be based on the 0.375% U.S. Treasury due Nov. 30, 2025 and a fixed spread of 38 bps.

2028 note offer

Holders had tendered $4,491,692,000 of the $9 billion outstanding 4.3% senior notes due 2028 (Cusip: 126650CX6) as of the early tender deadline. CVS expects to accept for purchase $1,950,081,000 of the early tendered notes, with pricing based on the 0.875% U.S. Treasury due Nov. 15, 2030 and a fixed spread of 57 bps.

As previously reported, the total consideration will be determined at 9 a.m. ET Dec. 21.

Holders who tendered notes by the early tender deadline are eligible to receive the total consideration, which includes an early tender payment of $30 per $1,000 of notes.

CVS will also pay interest.

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

The early settlement date is expected to be Dec. 22.

The offer expires at 11:59 p.m. ET Jan. 6, amended from 11:59 p.m. ET Jan. 5. The expiration date was pushed back due to a recent announcement that federal agencies and departments will be closed on Dec. 24, according to the release.

The purpose of the tender offers is to refinance a portion of CVS Health’s debt and to lower its overall indebtedness.

Barclays (800 438-3242, 212 528-7581), BofA Securities, Inc. (980 387-3907) and Goldman Sachs & Co. LLC (212 902-6351) are the dealer managers.

D.F. King & Co., Inc. (212 269-5550, 800 714-3305 cvs@dfking.com) is the tender and information agent.

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

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