By Andrea Heisinger
New York, Sept. 19 - Novartis Capital Corp. gave terms of its $2 billion sale of notes (Aa2/AA-/) priced in two tranches in an FWP filing with the Securities and Exchange Commission.
A $1.5 billion tranche of 2.4% 10-year notes sold at 99.225 to yield 2.488% with a spread of Treasuries plus 68 basis points. The tranche was sold at the tight end of talk in the 70 bps area, the source said.
There is a make-whole call at 10 bps over Treasuries on the 10-year notes.
The second part was $500 million of 3.7% 30-year bonds priced at 98.325 to yield 3.794% with a spread of Treasuries plus 80 bps. The bonds were also priced at the low end of guidance in the 82 bps area.
The bonds also have a make-whole call at Treasuries plus 12.5 bps.
There was a do-not-grow provision on the deal.
J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC were the active bookrunners. Passive bookrunners were Bank of America Merrill Lynch, BNP Paribas Securities Corp., Citigroup Global Markets Inc. and UBS Securities LLC.
Proceeds will be used for general corporate purposes outside of Switzerland, including refinancing of short-term and long-term debt.
The notes are guaranteed by Basel, Switzerland-based parent company Novartis AG.
Novartis Capital was last in the U.S. bond market with a $5 billion issue of notes in three tranches. A 4.4% 10-year note from that offering sold at 78 bps over Treasuries.
The issuer is a holding company for pharmaceuticals and health care subsidiaries and is based in New York City.
| Issuer: | Novartis Capital Corp.
|
| Guarantor: | Novartis AG
|
| Issue: | Notes
|
| Amount: | $2 billion
|
| Bookrunners: | J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC (active), Bank of America Merrill Lynch, BNP Paribas Securities Corp., Citigroup Global Markets Inc., UBS Securities LLC (passive)
|
| Co-managers: | Barclays, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co., HSBC Securities (USA) Inc., RBS Securities Inc.
|
| Trade date: | Sept. 18
|
| Settlement date: | Sept. 21
|
| Ratings: | Moody's: Aa2
|
| Standard & Poor's: AA-
|
|
|
| 10-year notes
|
| Amount: | $1.5 billion
|
| Maturity: | Sept. 21, 2022
|
| Coupon: | 2.4%
|
| Price: | 99.225
|
| Yield: | 2.488%
|
| Spread: | Treasuries plus 68 bps
|
| Call: | Make-whole at Treasuries plus 10 bps
|
| Price talk: | 70 bps area
|
|
|
| 30-year bonds
|
| Amount: | $500 million
|
| Maturity: | Sept. 21, 2042
|
| Coupon: | 3.7%
|
| Price: | 98.325
|
| Yield: | 3.794%
|
| Spread: | Treasuries plus 80 bps
|
| Call: | Make-whole at Treasuries plus 12.5 bps
|
| Price talk: | 82 bps area
|
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