CVS Raises $4 Billion in Four-Part Bond Sale to Fund Takeover

CVS Caremark Corp. (CVS), the largest provider of prescription drugs in the U.S., raised $4 billion in a four-part bond sale to fund its $2.1 billion takeover of infusion-services provider Coram LLC.

CVS issued two $1.25 billion portions of 2.25 percent, five-year notes at a relative yield of 85 basis points more than similar-maturity Treasuries and 4 percent, 10-year securities at a spread of 125 basis points, according to data compiled by Bloomberg. The company also sold $750 million slices of 1.2 percent, three-year debt at 65 basis points and 5.3 percent, 30-year bonds at 145.

Proceeds will be used to pay back commercial paper and for general corporate purposes, including the buyout, according to a person with knowledge of the deal who asked not to be identified, citing lack of authorization to speak publicly.

CVS, which also runs the second-largest U.S. drugstore chain, agreed to buy the provider from Blackstone Group LP’s Apria Healthcare Group Inc. on Nov. 27, the Woonsocket, Rhode Island-based company said in a statement. With the deal, CVS will enter the business of providing therapies such as antibiotics, nutrition and pain medicine to patients intravenously.

The company last tapped the bond market in November 2012, issuing $1.25 billion of 2.75 percent notes due Dec. 1, 2022, according to data compiled by Bloomberg. The securities traded on Nov. 29 at 93 cents on the dollar to yield 3.67 percent, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

The deal would be the largest for CVS since buying Longs Drug Stores for about $2.8 billion in 2008, beating the largest drugstore chain Walgreen Co. in a bidding contest.

To contact the reporter on this story: Matt Robinson in New York at mrobinson55@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

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