HEALTHCARE: AbbVie (ABBV: A3 pos / A-): AbbVie coming in US$

New long 3-year:

• Reoffer: 99.833 to yield 2.553%
• Spread set earlier at MS+19bp (guidance was MS + 21 bps area)
• Size: E3bln (MNI expected E3-5bln)
• Books closed in excess of E27bln (inc E1.5bln JLM interest)
• HR: 107% vs 2.20% Apr-28 Bobl
• Maturity: 27 July 2028
• Coupon: 2.50%, short first
• ISIN: EU000A2SCAR0

New 10-year:

• Reoffer: 98.992 to yield 2.993%
• Spread set earlier at MS+50bp (guidance wasMS + 53 bps area
• Size: E4bln (MNI expected E3-5bln)
• Books in excess of E33bln (inc E1.5bln JLM interest)
• HR 97% vs 2.50% Feb-35 Bund
• Maturity: 29 January 2035
• Coupon: 2.875%, long first
• ISIN: EU000A2SCAS8

For both:

• Total size: E7bln (MNI expected E7-8bln)
• Settlement: 27 January 2025 (T+5)
• Bookrunners: BARCLAYS / BNP / JPM (DM/B&D)
• Timing: Hedge deadline 13:25GMT / 14:25CET. Pricing to follow

From market source

Speaking in Brussels following a Eurogroup meeting,  Finance Minister Jörg Kukies says regarding the incoming Trump administration in the US "We need to wait until concrete steps come from the US, we need to keep cooperation and dialogue." On the prospect of tariffs being imposed on EU goods, Kukies says "Germany is an open economy [and] is one of the most vulnerable to tariffs." Calls tariffs "a detriment to growth", claiming "We do now know which specifics are planned, we have to wait."

• Kukies' comments come just two days after Economy Minister Robert Habeck warned that the EU country "with the biggest trade surplus [with the US] is Germany - and that is a thorn in Donald Trump's side." Habeck said tariffs will hit the whole EU, but that "you can be pretty sure that the tariffs that he might want to impose will be targeted in such a way that they will particularly hit the German economy,"
• Counter to the more downbeat comments from gov't ministers, leader of the main opposition centre-right Christian Democratic Union Friedrich Merz has been more measured, saying at a leadership retreat for the pan-continental European People's Party over the weekend "I think Donald Trump is very predictable. He does what he says. In this respect, I think we can expect a lot more clarity in the coming weeks and months.” Merz is the strong favourite to lead the German gov't after the 23 Feb election. 

Goldman Sachs recommended selling the SFRZ5/Z6 spread late on Friday.

• They noted that “a relatively mild December CPI print answered the question as to what would break the fall in Treasuries, reducing what we had argued was as an excessive accumulation of hike risk on the U.S. curve.”
• They went on to suggest that “while the strength of growth signals remain consistent with a less urgent argument for cuts, we think the broader set of information supports the rates market building greater confidence in modal outcomes for gradually lower yields.”
• “Even with the CPI news, front-end inflation continues to suggest the market is more worried about durable price pressures than our economists.”