CVS Health launches cash tender offers for nine series of notes

By Marisa Wong

Los Angeles, Aug. 8 – CVS Health Corp. announced it has begun cash tender offers to purchase notes from nine series.

Specifically, CVS is tendering for four series of notes under any-and-all offers and five series of notes under maximum tender offers.

CVS is offering to purchase any and all of its $2 billion 3.125% senior notes due 2020, with pricing based on the 1.625% U.S. Treasury due March 15, 2020 and a fixed spread of 15 basis points.

CVS is also tendering for up to $2 billion aggregate principal amount of the following series of notes due 2020 less the aggregate principal amount of 2020 any-and-all notes tendered and accepted for purchase, with the notes listed in order of acceptance priority level:

• Its $1 billion floating-rate notes due 2020, with the total consideration fixed at $1,005 per $1,000 principal amount; and

• Its $2.75 billion 2.8% senior notes due 2020 with pricing based on the 1.5% U.S. Treasury due June 15, 2020 and a fixed spread of 20 bps.

CVS is tendering for any and all of the following series of notes due 2021:

• Its $550 million 4.125% senior notes due 2021, with pricing based on the 2.25% U.S. Treasury due Feb. 15, 2021 and a fixed spread of 20 bps;

• The $500 million 4.125% senior notes due 2021 issued by wholly owned subsidiary Aetna Inc., with pricing based on the 2% U.S. Treasury due Feb. 28, 2021 and a fixed spread of 20 bps; and

• The $600 million 5.45% senior notes due 2021 issued by Aetna’s wholly owned subsidiary, Coventry Health Care, Inc., with pricing based on the 2.375% U.S. Treasury due March 15, 2021 and a fixed spread of 37.5 bps.

Finally, CVS is tendering for up to $2 billion of the following series of notes due 2021 less the aggregate principal amount of 2021 any-and-all notes tendered and accepted for purchase, with the notes listed in order of acceptance priority level:

• Its $3 billion 3.35% senior notes due 2021, with pricing based on the 1.75% U.S. Treasury due July 31, 2021 and a fixed spread of 40 bps;

• Its $1 billion floating-rate notes due 2021, with the total consideration fixed at $1,006.50 per $1,000 principal amount; and

• Its $1.75 billion 2.125% senior notes due 2021, with pricing based on the 1.75% U.S. Treasury due July 31, 2021 and a fixed spread of 45 bps.

If the amount tendered under either maximum tender offer is less than the respective tender cap, the difference will not increase the tender cap of the other maximum tender offer, the company noted.

The any-and-all offers expire at 5 p.m. ET on Aug. 14.

Holders tendering notes under the any-and-all offers by the expiration time will be eligible to receive the total consideration. An early tender payment is not applicable to the any-and-all offers.

Notes tendered under the maximum tender offers by 5 p.m. ET on Aug. 21, the early tender date, will be eligible to receive the applicable total consideration, which includes an early tender payment of $30 per $1,000 principal amount.

Notes tendered under the maximum tender offers after the early tender deadline but at or prior to 11:59 p.m. ET on Sept. 5, the maximum tender offer expiration, will be eligible to receive the applicable tender offer consideration, which is the total consideration less the early tender payment.

Pricing will be determined at 11 a.m. ET on Aug. 14 for the any-and-all offers and at 10 a.m. ET on Aug. 21 for the maximum offers.

In addition, CVS will pay accrued interest to but excluding the applicable settlement date.

The settlement date for any-and-all notes tendered and accepted for purchase is expected to be Aug. 15. Settlement for any-and-all notes tendered under guaranteed delivery procedures is expected to occur on Aug. 19.

The settlement date for early tendered maximum tender offer notes is expected to be Aug. 23. Settlement for maximum tender offer notes tendered after the early deadline and accepted for purchase is expected to be Sept. 9.

Tenders may be withdrawn at or prior to 5 p.m. ET on Aug. 14 for the any-and-all notes and at or prior to 5 p.m. ET on Aug. 21 for the maximum tender notes.

The offers are not conditioned on any minimum principal amount of notes being tendered but are subject to a financing condition.

Barclays (800 438-3242 or 212 528-7581) and Goldman Sachs & Co. LLC (800 828-3182 or 212 902-2995) are dealer managers for the tender offers.

D.F. King & Co., Inc. (cvs@dfking.com or 212 269-5550 for banks and brokers only or 866 406-2283 for all others) is the tender and information agent.

CVS is a Woonsocket, R.I.-based retail pharmacy company.

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