HEALTHCARE
- Johnson & Johnson priced €4bn across 5 Parts (4,8,12,20,30yr). The deal attracted over €22bn in demand. The company also raised $5bn in 5 parts. The proceeds were mainly used for the acquisition of Intra-Cellular. Bearing in mind that ITCI does not close until later in the year, it is interesting that they choose to tap the market now. Given potential volatility this is understandable.
- Boston Scientific earned rating upgrades to A- from S&P and Fitch. On Friday, it brought €1.5bn to pay for the €1bn Mar 25 notes. We calculated a Fair-Value based on where the curve was, not on where it was going following the upgrades. The new bonds came 12 & 7bps inside FV and brought the secondary curve another 4bps tighter. Book size €5.2bn.
- We wrote about Bayer and its use of the Modern Ag Alliance lobby group to push through favourable legislation in Iowa and Missouri. It is worth following these cases as they may shed light on a potential shift in sentiment among Republican lawmakers, which may help at the Federal level. If Bayer can release nearly €6bn in reserves for remaining Glyphosate cases this will cause a significant repricing. Still early days though.
- Another very strong week for Eurofins. The 31s are now 30bps tighter this month. The same performance cannot be said of the Equity but, in a spread compression environment, wider names perform.
- Stryker closed its purchase of Inari ($4.9bn) but had already funded $3bn in the USD market.
- AbbVie also issued $4bn in the USD market. It is funding significant 2025 maturities ($6.65bn).
Philips and Medtronic both suffered significant equity price falls (-10%, -8%) on weak Chinese demand among other reasons. Credit spreads were helped by a generally strong market and managed small gains.
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