UnitedHealth sells $2.95 billion of notes; credit spreads firm; high-grade outflows rise

By Cristal Cody

Tupelo, Miss., Dec. 13 – UnitedHealth Group Inc. brought a $2.95 billion four-part bond deal to the high-grade market on Thursday on the tight side of guidance and better than initial talk.

The company stood down with the offering over the past two sessions until moving forward in Thursday’s session, a market source said.

The Markit CDX North American Investment Grade 31 index ended the day more than 1 basis point better at a spread of 77 bps. Credit spreads almost have retraced last week’s losses when spreads widened about 5 bps.

Week to date, more than $4 billion of investment-grade bonds have priced, near the top end of syndicate forecasts of no supply to about $5 billion of issuance for the week.

For the week ended Dec. 12, Lipper US Fund Flows reported a third consecutive week of outflows. Corporate investment-grade funds had outflows of $3.72 billion, up from outflows of $1.27 billion in the previous week.

In the secondary market, high-grade bonds headed out on Thursday mostly unchanged to slightly tighter.

UnitedHealth’s existing bonds were unchanged and have been mostly flat in the secondary market over the week, a source said.

AstraZeneca plc’s 4% notes due Jan. 17, 2029 were steady but traded more than a point weaker than where the issue priced in August.

Dow Chemical Co.’s new 4.8% senior notes due Nov. 30, 2028 were flat and remain wider than issuance.

DowDuPont Inc.’s 4.725% notes due Nov. 15, 2028 also were unchanged but traded about 5 bps better than where the issue priced in November.

UnitedHealth prices

UnitedHealth Group priced $2.95 billion of senior notes (A3/A+/A-) in four tranches on the tight side of guidance and better than initial talk on Thursday, according to a market source.

UnitedHealth sold $750 million of 3.5% notes due Feb. 15, 2024 at a spread of 80 bps over Treasuries. Price guidance was in the Treasuries plus 85 bps area, plus or minus 5 bps.

A $300 million tranche of 3.7% seven-year notes priced at a spread of 90 bps over Treasuries, on the tight side of guidance in the Treasuries plus 95 bps area, plus or minus 5 bps.

The company sold $850 million of 3.875% 10-year notes with a Treasuries plus 100 bps spread. The notes were guided to print in the Treasuries plus 105 bps area, plus or minus 5 bps.

A $1.05 billion tranche of 4.45% 30-year notes priced with a spread of 130 bps over Treasuries, on the tight side of guidance in the 135 bps over Treasuries area, plus or minus 5 bps.

J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Mizuho Securities USA Inc. and U.S. Bancorp Investments Inc. were the bookrunners.

The diversified health company is based in Minnetonka, Minn.

AstraZeneca unchanged

AstraZeneca’s 4% notes due Jan. 17, 2029 (A3/BBB+/A-) traded mostly unchanged on Thursday at 98.375 bid, a market source said.

The Cambridge, England, biopharmaceutical company sold $1 billion of the notes on Aug. 14 as part of a $3 billion four-part offering at 99.59 to yield 4.049%, or a Treasuries plus 115 bps spread.

Dow Chemical flat

Dow Chemical’s 4.8% notes due Nov. 30, 2028 were flat on the day at 186 bps bid, according to a market source.

The company sold $600 million of the notes (Baa2/BBB/BBB+) on Nov. 28 at a Treasuries plus 175 bps spread.

Dow Chemical is a specialty chemicals company based in Midland, Mich.

DowDuPont stable

DowDuPont’s 4.725% notes due Nov. 15, 2028 were quoted unchanged in the secondary market at 155 bps bid, a market source said.

The company sold $2.25 billion of the 10-year notes on Nov. 14 at a spread of 160 bps over Treasuries.

Wilmington, Del.-based DowDuPont is expected to become a stand-alone company focused on specialty products following the spinoffs of its agriculture and materials science businesses, Dow Chemical and Corteva Inc., in 2019.

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