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Monday, 10 December 2018

CVS bonds give back some gains after bouncing on break

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  • A CVS pharmacy

Bonds issued by drugstore chain CVS Health were giving back some gains in secondary on Wednesday, but were still trading tighter than where the US$40bn nine-part offering priced a day earlier.

The US$8bn 30-year bond was being quoted at T+180bp after hitting a tight of T+178bp, but was still 15bp inside its initial pricing level of T+195bp, according to MarketAxess data.

It was a similar story for the US$9bn 10-year tranche, which was trading at T+152bp after touching a low of T+148bp and pricing at T+160bp.

CVS new bonds were the most traded securities early in the session ahead of what looks to be another volatile day as stocks sink amid heightened fears over a potential trade war.

The deal - the US high-grade market’s third biggest trade ever - saw a final order book of around US$111bn-$112bn. That is the largest order book ever seen for a US dollar corporate bond, according to IFR data.

Proceeds will help CVS finance its US$69bn acquisition of health insurer Aetna.

 

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