Bayer sells megadeal for purchase of Merck unit; CBL, Ares price; spreads generally ease

By Aleesia Forni

Virginia Beach, Oct. 1 – Bayer US Finance LLC came to the primary market with a $7 billion offering of senior on Wednesday amid a weaker session for high-grade bonds.

The megadeal was well received by investors despite the market’s tone, attracting an order book that was more than four times oversubscribed.

All six tranches of the deal sold at the tight end of price talk.

The company plans to use proceeds in order to finance its acquisition of global health care company Merck & Co. Inc.’s consumer-care business.

Away from the Bayer new issue, the primary market hosted a handful of smaller-sized deals on Wednesday.

CBL & Associates LP came to market with $300 million of 10-year senior notes, while Inter-American Development Bank priced $500 million of bonds due 2018.

Both deals sold in line with price talk.

There was also a $250 million offering of five-year bonds priced by Ares Finance Co. LLC.

In other market action, Freddie Mac sold a $500 million tap of its Reference Notes due July 28, 2017 via an internet-based auction on Wednesday.

Even with an empty Monday session in which no new deals sold, the primary market has still seen more than $17 billion of new issuance this week.

Sources had expected around $20 billion to $25 billion of supply.

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