Retail News Breaks Archives
CVS announces results of debt tender offers
December 27th, 2012
WOONSOCKET, R.I. – CVS Caremark Corp. has bought back more than $1.7 billion in senior notes under a tender offer initiated late last month.
Reporting the final results of the tender offer this week, CVS said an aggregate principal amount of $1.74 billion of the notes was tendered.
Specifically, the company tendered about $605.7 million of its 6.60% senior notes due in 2019, $279.5 million of its 6.125% senior notes maturing in 2016 and $855.5 million of its 5.75% senior notes coming due in 2017.
Under the cash tender offer made on Nov. 26, CVS said it would purchase any and all of its $1 billion in 6.60% senior notes due 2019 and up to $1 billion of its $2.45 billion in 6.125% senior notes due 2016 and 5.750% senior notes due 2017, minus the amount of the 2019 tendered and accepted for purchase.
Chief financial officer David Denton said at the time that the favorable interest rate environment offered a good opportunity for the company to refinance a portion of its debt.
Earlier this month, CVS had amended the tender offer by increasing the maximum aggregate principal amount of the 2016 and 2017 notes purchased to $1.325 billion.
Last week, Fitch Ratings affirmed its ratings on CVS Caremark, including the long-term Issuer Default Rating at BBB+. The outlook for CVS is "stable."
"The affirmations reflect the company's relatively steady credit metrics and strong liquidity position," Fitch stated. "The ratings also consider CVS' strong positioning in all prescription distribution channels, with a No. 2 market position in the retail and PBM segments and a No. 1 position in the fast-growing specialty pharmacy business, making it the largest provider of prescriptions in the United States, with a 21% share of 2011 prescription volume."
CVS has debt maturities of $550 million each in 2014 and 2015 and $700 million in 2016, Fitch reported.
"The company is well-positioned to drive continued market share gains and capitalize on favorable industry trends," the rating agency added.