Published on 11/7/2014 in the Prospect News Investment Grade Daily.
New Issue: Walgreens details $8 billion sale of notes in seven tranches
By Aleesia Forni
Virginia Beach, Nov. 7 – Walgreens Boots Alliance Inc., a wholly owned subsidiary of Walgreens Co., priced $8 billion of senior notes (Baa2/BBB/) on Thursday in seven tranches and released the details of the offering in an FWP filing with the Securities and Exchange Commission on Friday.
Walgreens came to market with $750 million of floaters due 2016 priced at par with a spread of 45 basis points over Libor.
A $750 million tranche of 1.75% notes due 2017 priced at 99.863 to yield 1.797%, or Treasuries plus 80 bps.
There was also a $1.25 billion tranche of 2.7% five-year notes sold with a spread of Treasuries plus 105 bps. Pricing was at 99.879 to yield 2.726%.
Walgreens also sold $1.25 billion of 3.3% notes due 2021 priced at 125 bps over Treasuries. The notes sold at 99.727 to yield 3.344%.
A $2 billion tranche of 3.8% 10-year notes sold at 99.769 to yield 3.828%, or Treasuries plus 145 bps.
The company also priced $500 million of 4.5% notes due 2034 at Treasuries plus 145 bps. Pricing was at 99.335 to yield 4.551%.
Finally, $1.5 billion of 4.8% notes due 2044 sold at 99.984 to yield 4.801% with a spread of 170 bps over Treasuries.
Proceeds will be used to acquire the remaining 55% of the issued and outstanding share capital of Alliance Boots GmbH, to refinance Alliance Boots’ existing borrowings and to pay related fees and expenses. Proceeds may also be used for general corporate purposes, including the repayment of the company’s 1% notes due 2015.
The bookrunners were Goldman Sachs & Co., BofA Merrill Lynch, Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC, HSBC Securities (USA) Inc., J.P. Morgan Securities LLC and Wells Fargo Securities LLC.
Walgreens is a Deerfield, Ill.-based drugstore chain.
| Issuer: | Walgreens Boots Alliance Inc.
|
| Issue: | Senior notes
|
| Amount: | $8 billion
|
| Bookrunners: | Goldman Sachs & Co., BofA Merrill Lynch, Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC, HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, Wells Fargo Securities LLC
|
| Senior co-managers: | MUFG, RBS Securities Inc., SG Americas Securities, LLC, UniCredit Capital Markets LLC, U.S. Bancorp Investments, Inc.
|
| Co-managers: | BB&T Capital Markets, Fifth Third Securities, Inc., Lloyds Securities Inc., Loop Capital Markets LLC, Mizuho Securities USA Inc., Samuel A. Ramirez & Co., Inc., SMBC Nikko Securities America, Inc., SunTrust Robinson Humphrey, Inc.
|
| Trade date: | Nov. 6
|
| Settlement date: | Nov. 18
|
| Ratings: | Moody’s: Baa2
|
| Standard & Poor’s: BBB
|
| Distribution: | SEC-registered
|
|
|
| Floating-rate notes
|
| Amount: | $750 million
|
| Maturity: | May 18, 2016
|
| Coupon: | Libor plus 45 bps
|
| Price: | Par
|
| Yield: | Libor plus 45 bps
|
| Price talk: | Libor plus 45 bps to 50 bps, tightened from Libor plus 50 bps area
|
|
|
| Three-year notes
|
| Amount: | $750 million
|
| Maturity: | Nov. 17, 2017
|
| Coupon: | 1.75%
|
| Price: | 99.863
|
| Yield: | 1.797%
|
| Spread: | Treasuries plus 80 bps
|
| Price talk: | Treasuries plus 80 bps to 85 bps, tightened from Treasuries plus 100 bps area
|
| Make-whole call: | Treasuries plus 15 bps
|
|
|
| Five-year notes
|
| Amount: | $1.25 billion
|
| Maturity: | Nov. 18, 2019
|
| Coupon: | 2.7%
|
| Price: | 99.879
|
| Yield: | 2.726%
|
| Spread: | Treasuries plus 105 bps
|
| Price talk: | Treasuries plus 105 bps to 110 bps, tightened from Treasuries plus 125 bps area
|
| Call option: | Make-whole call at Treasuries plus 15 bps prior to Oct. 18, 2019, then callable at par
|
|
|
| Seven-year notes
|
| Amount: | $1.25 billion
|
| Maturity: | Nov. 18, 2021
|
| Coupon: | 3.3%
|
| Price: | 99.727
|
| Yield: | 3.344%
|
| Spread: | Treasuries plus 125 bps area
|
| Price talk: | Treasuries plus 125 bps to 130 bps, tightened from Treasuries plus 145 bps area
|
| Call option: | Make-whole call at Treasuries plus 20 bps prior to Sept. 18, 2021, then callable at par
|
|
|
| 10-year notes
|
| Amount: | $2 billion
|
| Maturity: | Nov. 18, 2024
|
| Coupon: | 3.8%
|
| Price: | 99.769
|
| Yield: | 3.828%
|
| Spread: | Treasuries plus 145 bps
|
| Price talk: | Treasuries plus 145 bps to 150 bps, tightened from Treasuries plus 160 bps area
|
| Call option: | Make-whole call at Treasuries plus 20 bps prior to Aug. 18, 2024, then callable at par
|
|
|
| 20-year bonds
|
| Amount: | $500 million
|
| Maturity: | Nov. 18, 2034
|
| Coupon: | 4.5%
|
| Price: | 99.335
|
| Yield: | 4.551%
|
| Spread: | Treasuries plus 145 bps
|
| Price talk: | Treasuries plus 145 bps to 150 bps, tightened from Treasuries plus 170 bps area
|
| Call option: | Make-whole call at Treasuries plus 20 bps prior to May 18, 2034, then callable at par
|
|
|
| 30-year bonds
|
| Amount: | $1.5 billion
|
| Maturity: | Nov. 18, 2044
|
| Coupon: | 4.8%
|
| Price: | 99.984
|
| Yield: | 4.801%
|
| Spread: | Treasuries plus 170 bps
|
| Price talk: | Treasuries plus 170 bps to 175 bps, tightened from Treasuries plus 187.5 bps area
|
| Call option: | Make-whole call at Treasuries plus 25 bps prior to May 18, 2044, then callable at par
|
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