CVS Health gives results of tender offers for four series of notes

By Sarah Lizee

Olympia, Wash., Aug. 15 – CVS Health Corp. announced the final results of its any-and-all cash tender offers to purchase notes from four series.

The offer expired at 5 p.m. ET on Aug. 14.

CVS announced the any-and-all offers on Aug. 8, along with maximum tender offers for five series of notes under maximum tender offers.

As of the expiration time, CVS Health received the following tendered amounts under the any-and-all offers, with pricing listed for each $1,000 principal amount:

• $1,269,297,000 of its $2 billion 3.125% senior notes due 2020 for a total consideration of $1,005.86, with pricing based on the 1.625% U.S. Treasury due March 15, 2020 and a fixed spread of 15 basis points;

• $328,084,000 of its $550 million 4.125% senior notes due 2021 for a total consideration of $1,033.32, with pricing based on the 2.25% U.S. Treasury due Feb. 15, 2021 and a fixed spread of 20 bps;

• $297,403,000 for the $500 million 4.125% senior notes due 2021 issued by wholly owned subsidiary Aetna Inc. for a total consideration of $1,034.37, with pricing based on the 2% U.S. Treasury due Feb. 28, 2021 and a fixed spread of 20 bps; and

• $412,825,000 of the $600 million 5.45% senior notes due 2021 issued by Aetna’s wholly owned subsidiary, Coventry Health Care, Inc., for a total consideration of $1,053.11, with pricing based on the 2.375% U.S. Treasury due March 15, 2021 and a fixed spread of 37.5 bps.

Additionally, holders tendered notes under guaranteed delivery procedures, including $7.53 million of the 3.125% notes, $2,298,000 of the 4.125% notes issued by CVS, $2,346,000 of the 4.125% notes issued by Aetna and $261,000 of the 5.45% notes issued by Coventry.

CVS said it expects to accept for purchase all of the tendered notes.

Pricing for the any-and-all offers was set at 11 a.m. ET on Aug. 14.

As previously reported, CVS is also tendering for up to $2 billion aggregate principal amount of the following series of notes due 2020 less the aggregate principal amount of 2020 any-and-all notes tendered and accepted for purchase, with the notes listed in order of acceptance priority level:

• Its $1 billion floating-rate notes due 2020, with the total consideration fixed at $1,005 per $1,000 principal amount; and

• Its $2.75 billion 2.8% senior notes due 2020 with pricing based on the 1.5% U.S. Treasury due June 15, 2020 and a fixed spread of 20 bps.

Finally, CVS is tendering for up to $2 billion of the following series of notes due 2021 less the aggregate principal amount of 2021 any-and-all notes tendered and accepted for purchase, with the notes listed in order of acceptance priority level:

• Its $3 billion 3.35% senior notes due 2021, with pricing based on the 1.75% U.S. Treasury due July 31, 2021 and a fixed spread of 40 bps;

• Its $1 billion floating-rate notes due 2021, with the total consideration fixed at $1,006.50 per $1,000 principal amount; and

• Its $1.75 billion 2.125% senior notes due 2021, with pricing based on the 1.75% U.S. Treasury due July 31, 2021 and a fixed spread of 45 bps.

If the amount tendered under either maximum tender offer is less than the respective tender cap, the difference will not increase the tender cap of the other maximum tender offer, the company noted.

Holders tendering notes under the any-and-all offers by the expiration time will be eligible to receive the total consideration. An early tender payment is not applicable to the any-and-all offers.

Notes tendered under the maximum tender offers by 5 p.m. ET on Aug. 21, the early tender date, will be eligible to receive the applicable total consideration, which includes an early tender payment of $30 per $1,000 principal amount.

Notes tendered under the maximum tender offers after the early tender deadline but at or prior to 11:59 p.m. ET on Sept. 5, the maximum tender offer expiration, will be eligible to receive the applicable tender offer consideration, which is the total consideration less the early tender payment.

Pricing will be determined at 10 a.m. ET on Aug. 21 for the maximum offers.

In addition, CVS will pay accrued interest to but excluding the applicable settlement date.

The settlement date for any-and-all notes tendered and accepted for purchase is expected to be Aug. 15. Settlement for any-and-all notes tendered under guaranteed delivery procedures is expected to occur on Aug. 19.

The settlement date for early tendered maximum tender offer notes is expected to be Aug. 23. Settlement for maximum tender offer notes tendered after the early deadline and accepted for purchase is expected to be Sept. 9.

Tenders could be withdrawn at or prior to 5 p.m. ET on Aug. 14 for the any-and-all notes and at or prior to 5 p.m. ET on Aug. 21 for the maximum tender notes.

The offers are not conditioned on any minimum principal amount of notes being tendered but are subject to a financing condition.

Barclays (800 438-3242 or 212 528-7581) and Goldman Sachs & Co. LLC (800 828-3182 or 212 902-2995) are dealer managers for the tender offers.

D.F. King & Co., Inc. (cvs@dfking.com or 212 269-5550 for banks and brokers only or 866 406-2283 for all others) is the tender and information agent.

CVS is a Woonsocket, R.I.-based retail pharmacy company.

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