(Bloomberg) — Bond investors are lining up to finance CVS Health Corp.’s takeover of Omnicare Inc. and Target Corp.’s pharmacies and clinics.
The drugstore owner received about $45 billion of orders for a bond sale of $15 billion, according to a person with knowledge of the deal. The demand is allowing CVS (NYSE:CVS) to lower yields it’s proposing on the six-part issue, said the person, who asked not to be identified because the information isn’t public.
“You’re seeing this influx of mega-offerings and what’s so interesting is that it seems that demand for these deals has been pretty high, despite their size,” said Jody Lurie, a corporate credit analyst at Janney Montgomery Scott LLC in Philadelphia.
CVS announced plans to raise as much as $20 billion in debt in a regulatory filing last month. The company is buying nursing-home pharmacy Omnicare Inc. in a deal valued at $12.7 billion and has a $13 billion bridge financing commitment from Barclays PLC and Deutsche Bank AG to back the takeover. CVS’s $1.9 billion acquisition of Target’s pharmacies and clinics business will also be funded with debt.