Merck takes in tenders for $1.8 billion of eight note series in offer

By Susanna Moon

Chicago, Oct. 15 – Merck & Co., Inc. said it accepted tenders for about $1.8 billion of notes in the offer for its $4.76 billion outstanding principal amount of eight series of notes.

The tender offers ended at 5 p.m. ET on Oct. 14, with settlement on Oct. 15. The offers began Oct. 6.

The breakdown for the tendered amounts was as follows:

• $96,923,000 of the $250 million outstanding 6.3% debentures due 2026;

• $173,493,000 of the $500 million outstanding 6.4% debentures due 2028;

• $142,255,000 of the $500 million outstanding 5.95% debentures due 2028;

• $432,389,000 of the $1.15 billion outstanding 6.5% senior notes due 2033;

• $127.87 million of the $500 million outstanding 5.75% notes due 2036;

• $33,815,000 of the $112,947,000 outstanding 5.76% notes due 2037;

• $475,948,000 of the $1 billion outstanding 6.55% senior notes due 2037; and

• $331,093,000 of the $750 million outstanding 5.85% notes due 2039.

The company will pay $129,669,405 for the 6.3% debentures, $236,395,008 for the 6.4% debentures, $189,907,185 for the 5.95% debentures, $616,004,910 for the 6.5% notes, $171,679,328 for the 5.75% notes, $44,687,537 for the 5.76% notes, $678,701,055 for the 6.55% notes and $445,642,073 for the 5.85% notes, according to a company press release.

Pricing details

Pricing for each $1,000 principal amount of the first three series of notes was set at 2 p.m. ET on Oct. 14 using the 2.375% Treasury notes due Aug. 15, 2024 plus a fixed spread as follows:

• $1,319.66 for the 6.3% debentures using spread of 70 basis points;

• $1,354.74 for the 6.4% debentures using spread of 90 bps; and

• $1,312.83 for the 5.95% debentures using spread of 95 bps.

The next five series of notes were priced using the 3.375% Treasury notes due May 15, 2044 plus a fixed spread as follows:

• $1,400.46 for the 6.5% notes using spread of 60 bps;

• $1,318.65 for the 5.75% notes using spread of 65 bps;

• $1,297.21 for the 5.76% notes using spread of 80 bps;

• $1,420.54 for the 6.55% notes using spread of 80 bps;

• $1,328.91 for the 5.85% notes using spread of 80 bps.

Pricing was set using the bid-side yield to maturity of the U.S. Treasury reference security plus the fixed spread.

The company also will pay accrued interest to but excluding the settlement date.

The offers are conditioned on closing of the company’s euro-denominated senior notes offering. Merck said it expected to fund the tender offer using proceeds from the issue.

Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106 collect) and J.P. Morgan Securities LLC (866 834-4666 or 212 834-4811 collect) are the lead dealer managers. Global Bondholder Services Corp. (866 470-4200) is the tender agent and information agent.

The health care company is based in Whitehouse Station, N.J.

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