Published on 2/8/2018 in the Prospect News Investment Grade Daily.
New Issue: McKesson details $600 million of 3.95% notes priced at 99.975, yielding 3.953%
By Devika Patel
Knoxville, Tenn., Feb. 8 – McKesson Corp. offered further details about an upsized $600 million sale of 3.95% 10-year notes (Baa2/BBB+/BBB+) that priced on Wednesday at a spread of Treasuries plus 112.5 basis points, according an FWP filed with the Securities and Exchange Commission.
The notes priced at 99.975 to yield 3.953%.
The deal was upsized from $500 million and priced on the tight side of guidance in the Treasuries plus 130 bps to 135 bps area.
Goldman Sachs & Co., BofA Merrill Lynch, J.P. Morgan Securities LLC, HSBC Securities (USA) Inc. and Wells Fargo Securities LLC were the bookrunners.
The company also priced €750 million of notes in two tranches on Wednesday.
Proceeds from both issues will be used to finance the tender offers for up to $1.1 billion of the company’s 7.5% notes due 2019, 4.75% notes due 2021, 7.65% debentures due 2027, 6% notes due 2041 and 4.883% notes due 2044 and to fund the redemption of the 7.5% notes, if applicable, and for working capital and general corporate purposes.
McKesson is a San Francisco-based health-care services and information technology company.
| Issuer: | McKesson Corp.
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| Amount: | $600 million
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| Description: | Notes
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| Maturity: | Feb. 16, 2028
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| Bookrunners: | Goldman Sachs & Co., BofA Merrill Lynch, J.P. Morgan Securities LLC, HSBC Securities (USA) Inc. and Wells Fargo Securities LLC
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| Senior co-managers: | Barclays, Citigroup Global Markets Inc. and MUFG
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| Co-managers: | BNP Paribas Securities Corp., Deutsche Bank Securities Inc., UniCredit Capital Markets LLC, Scotia Capital (USA) Inc., TD Securities (USA) LLC, U.S. Bancorp Investments Inc., Rabo Securities USA, Inc., ING Financial Markets LLC, Williams Capital Group LP, PNC Capital Markets LLC, DnB NOR Markets Inc. and RBS Securities Inc.
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| Coupon: | 3.95%
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| Price: | 99.975
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| Yield: | 3.953%
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| Call: | Make-whole call at Treasuries plus 20 bps until Nov. 16, 2027, then a par call
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| Spread: | Treasuries plus 112.5 bps
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| Trade date: | Feb. 7
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| Settlement date: | Feb. 16
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| Ratings: | Moody’s: Baa2
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| S&P: BBB+
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| Fitch: BBB+
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| Distribution: | SEC registered
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| Price talk: | Treasuries plus 130 bps to 135 bps area
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