CVS does $15 billion bond sale following Greece deal; AT&T, Verizon soft; Charter tight

By Aleesia Forni and Cristal Cody

Virginia Beach, July 13 – CVS Health Corp. sold a $15 billion bond offering on Monday following news that Greece and Europe had reached a deal to avoid Greece’s exit from the Eurozone.

Proceeds from the day’s only new issue will be used to fund the company’s planned acquisition of Omnicare, Inc. and the pharmacy and clinic businesses of Target Corp.

The company joined the slew of investment-grade issuers that have entered the primary during the first half of the year with large deals in order to fund planned mergers and acquisitions.

Also on Monday, Export Development Canada and the European Investment Bank joined the week’s forward calendar, announcing plans to price bonds during what is predicted to be a hefty week of new issuance for high-grade bonds.

Sources are calling for around $25 billion to $30 billion of supply.

Bonds were mixed over the trading session, while credit spreads improved after a flat start.

AT&T Inc.’s 3.4% notes due 2025 eased 2 basis points.

Verizon Communications Inc.’s 3.5% notes due 2024 traded 2 bps softer.

Charter Communications Inc.’s senior secured notes (Ba1/BBB-) priced in the previous week to fund its acquisition of Time Warner Cable Inc. traded mostly better.

The Markit CDX North American Investment Grade series 23 index tightened 1 bp over the day to a spread of 68 bps.

CVS offers $15 billion

CVS Health priced $15 billion of senior notes (Baa1/BBB+) in six tranches on Monday, according to an informed source.

All six parts sold at the tight end of guidance, which tightened between 15 bps to 30 bps from initial price thoughts.

A $2.25 billion tranche of 1.9% three-year notes sold at 99.93 to yield 1.924%, or Treasuries plus 85 bps.

There was also $2.75 billion of 2.8% five-year notes priced with a spread of Treasuries plus 110 bps. The issue sold at 99.926 to yield 2.816%.

Also priced was $1.5 billion of 3.5% seven-year notes at 99.957 to yield 3.507% with a spread of Treasuries plus 135 bps.

A $3 billion tranche of 3.875% 10-year notes priced at 99.994 to yield 3.998%. The notes sold at Treasuries plus 155 bps.

The company also sold $2 billion of 4.875% 20-year bonds with a spread of Treasuries plus 175 bps. Pricing was at 98.443 to yield 4.999%.

Finally, $3.5 billion of 5.125% 30-year bonds priced at 99.635 to yield 5.149%, or Treasuries plus 190 bps.

Plans for a three-year floating-rate tranche were dropped prior to the deal’s launch.

Bookrunners are Barclays, BNY Mellon Capital Markets LLC, J.P. Morgan Securities LLC and Wells Fargo Securities LLC.

Proceeds from the sale will be used by CVS Health to acquire Omnicare, Inc. and the pharmacy and clinic businesses of Target Corp.

The pharmacy retailer is based in Scarsdale, N.Y.

EDC sets talk

Export Development Canada set price talk for a planned $1 billion offering of global notes (Aaa/AAA) due July 21, 2020 on Monday in the mid-swaps plus 2 bps area, according to a market source.

BofA Merrill Lynch, Citigroup Global Markets Inc., JPMorgan and TD Securities are the joint bookrunners.

The government-backed agency for exporters is based in Ottawa.

EIB on deck

The European Investment Bank set price talk for a planned benchmark offering of seven-year global notes (Aaa/AAA/AAA) in the area of mid-swaps plus 16 bps, according to a market source.

Barclays, Deutsche Bank Securities Inc. and TD Securities are the bookrunners.

The lender for the European Union is based in Kirchberg, Luxembourg.

AT&T soft

AT&T’s 3.4% notes due 2025 eased 2 bps to 170 bps offered on Monday, according to a market source late afternoon.

The company sold $5 billion of the notes (/BBB+/A-) on April 23 at a spread of Treasuries plus 150 bps.

The telecommunications company is based in Dallas.

Verizon eases

Verizon’s 3.5% notes due 2024 headed out 2 bps weaker at 152 bps offered in secondary trading, a market source said.

The company sold $2.5 billion of the notes (Baa1/BBB+/A-) on Oct. 22, 2014 at Treasuries plus 135 bps.

The telecommunications company is based in New York City.

Charter tight

Charter Communications’ 4.908% notes due 2025 traded about 1 bp better from Friday at 250 bps offered earlier in the session, according to a market source.

The notes priced in a $4.5 billion offering on Thursday at Treasuries plus 260 bps.

Charter Communications’ 6.484% notes due 2045 were quoted at 328 bps offered in secondary trading. The company sold $3.5 billion of the 30-year bonds on Thursday at Treasuries plus 335 bps.

The provider of cable, internet and phone services is based in Stamford, Conn.

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