Merck upsizes jumbo deal; Japan Finance, Costco price; Pfizer, Hospira active on acquisition

By Aleesia Forni

Virginia Beach, Feb. 5 – The investment-grade primary saw Merck & Co., Inc. come to market with a jumbo bond offering during the session on Tuesday, helping push the week’s new issuance total past expectations.

The massive $8 billion deal met with solid demand, allow the underwriters to increase the amount from initial size thoughts of $6 billion.

All six tranches of the offering sold at the tight end of talk.

In other primary happenings, Japan Finance Organization for Municipalities and Costco Wholesale Corp. were each in the primary with $1 billion offerings, respectively.

The session also saw MUFG Americas Holdings Corp. price a new offering of bonds, though details of the sale were unavailable at press time.

More than $39 billion of new issuance has sold during a blockbuster week for high-grade bonds, blowing away expectations of a $25 billion to $30 billion week.

In the secondary market, investment-grade bond spreads eased over the session.

The Markit CDX North American Investment Grade index was 1 basis point wider at a spread of 66 basis points.

Bonds from Pfizer Inc. and Hospira, Inc. were active on Thursday following news that Pfizer would acquire Hospira for around $17 billion.

The deal will likely be financed through a combination of existing cash and new debt.

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