By Toni Weeks
San Luis Obispo, Calif., Sept. 5 – CVS Caremark Corp. announced the final results of its tender offers for any and all of its $1 billion of 6.25% senior notes due 2027 and up to a maximum amount of three other series of notes. The offers began Aug. 7.
The notes covered by the maximum tender offer are the company’s $1.5 billion 6.125% senior notes due 2039, $950 million 5.75% senior notes due 2041 and $1,310,308,000 5.75% senior notes due 2017.
The company had offered to purchase $2 billion – increased from $1.5 billion – principal amount of the maximum tender offer notes, less the principal amount of the 6.25% notes tendered.
As of 11:59 p.m. ET on Sept. 4, the expiration of the offers, the company had taken in an aggregate principal amount of $2,371,066,000 of notes over the four series. The company accepted for purchase all the notes tendered for the first three series of notes shown in the first table below but accepted just 38.1% of the fourth series of notes (5.75% notes due 2017). The priority level and amounts accepted for each series are detailed in the table below.
The total considerations per $1,000 principal amount of notes are noted in the second table. Pricing was set at 11 a.m. ET on Aug. 20 using the yield to maturity of a U.S. Treasury reference security plus a fixed spread.
The total consideration for each series of notes includes an early tender payment of $30 for each $1,000 principal amount of notes tendered by the early tender date, 5 p.m. ET on Aug. 20.
The company also will pay accrued interest up to but excluding the settlement date, which is expected to be Sept. 8.
The company said the purpose of the tender offers was to refinance a portion of its outstanding debt to take advantage of favorable interest rates by lowering overall interest expense and to improve earnings and cash flow going forward.
The tender offers were conditioned on the company obtaining financing but were not conditioned on any minimum principal amount of notes being tendered.
As previously reported, CVS Caremark priced $850 million of 2.25% five-year notes at 99.944 to yield 2.262%, or Treasuries plus 65 basis points, and $650 million of 3.375% notes due 2024 at 99.078 to yield 3.485%, or Treasuries plus 105 bps, on Aug. 7.
Barclays (800 438-3242 or 212 528-7581) and RBS Securities, Inc. (877 297-9832 or 203 897-6145) were the dealer managers. D.F. King & Co., Inc. (800 549-6746 or, for banks and brokers only, 212 269-5550) was the tender and information agent.
CVS Caremark is a pharmacy retailer based in Scarsdale, N.Y.
Results of CVS Caremark tender offers
| Notes | Amount outstanding | Amount tendered | Amount accepted | Final proration
|
| 6.25% notes due 2027 | $1 billion | $546,925,000 | $546,925,000 | N/A
|
| 6.125% notes due 2039 | $1.5 billion | $765,859,000 | $765,859,000 | 100%
|
| 5.75% notes due 2041 | $950 million | $456,804,000 | $456,804,000 | 100%
|
| 5.75% notes due 2017 | $1,310,308,000 | $601,478,000 | $230,412,000 | 38.1%
|
|
|
| Pricing
|
| Notes | Reference Treasury | Reference yield | Fixed spread | Total consideration
|
| 6.25% notes due 2027 | 2.5% notes due May 15, 2024 | 2.406% | 115 bps | $1,274.60
|
| 6.125% notes due 2039 | 3.625% notes due Feb. 15, 2044 | 3.218% | 110 bps | $1,274.76
|
| 5.75% notes due 2041 | 3.625% notes due Feb. 15, 2044 | 3.218% | 112 bps | $1,219.62
|
| 5.75% notes due 2017 | 0.875% notes due July 15, 2017 | 0.900% | 15 bps | $1,216.17
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
