At a time when Trump's tax repatriation holiday allowed many corporations to avoid issuing debt altogether, leading to what some have dubbed corporate quantitative tightening, and resulting in many cash-rich corporations to not issue any debt in 2018.
According to Bloomberg, the health insurer is selling senior unsecured bonds in 10 parts: the longest portion of the offering, a $3 billion security maturing in 2048, is expected to yield 1.87% points above Treasuries, a sharp tightening to initial price talk which was initially at around 2.05% points.
“It's one of those classic mega deals that gets everyone's attention.” Surprisingly, or perhaps not in light of today's tech rout, treasury yields failed to drift wider due to rate locks, the expected boost in new-issue supply has boosted the amount of yield investors demand to hold corporates over govvies, and as a result, investment-grade bond spreads over Treasuries widened by a material 6 bps since the end of July to 115 basis points.
Activist investor Carl Icahn, who had said it would be a “travesty” if it were to proceed, dropped his fight to block the takeover last month.
issued $40 billion of debt in March to help finance its takeover of Aetna, which remains the biggest bond sale of the year and third-largest ever in the US market. Verizon's $49 billion offering in 2013, which financed the telecom giant's acquisition of Vodafone's stake in Verizon Wireless, still ranks as the largest ever.