EU HEALTHCARE: Healthcare: Week in Review

Feb-21 15:04
  • Johnson & Johnson priced €4bn across 5 Parts (4,8,12,20,30yr). The deal attracted over €22bn in demand. The company also raised $5bn in 5 parts. The proceeds were mainly used for the acquisition of Intra-Cellular. Bearing in mind that ITCI does not close until later in the year, it is interesting that they choose to tap the market now. Given potential volatility this is understandable.
  • Boston Scientific earned rating upgrades to A- from S&P and Fitch. On Friday, it brought €1.5bn to pay for the €1bn Mar 25 notes. We calculated a Fair-Value based on where the curve was, not on where it was going following the upgrades. The new bonds came 12 & 7bps inside FV and brought the secondary curve another 4bps tighter. Book size €5.2bn.
  • We wrote about Bayer and its use of the Modern Ag Alliance lobby group to push through favourable legislation in Iowa and Missouri. It is worth following these cases as they may shed light on a potential shift in sentiment among Republican lawmakers, which may help at the Federal level. If Bayer can release nearly €6bn in reserves for remaining Glyphosate cases this will cause a significant repricing. Still early days though.
  • Another very strong week for Eurofins. The 31s are now 30bps tighter this month. The same performance cannot be said of the Equity but, in a spread compression environment, wider names perform.
  • Stryker closed its purchase of Inari ($4.9bn) but had already funded $3bn in the USD market.
  • AbbVie also issued $4bn in the USD market. It is funding significant 2025 maturities ($6.65bn).

Philips and Medtronic both suffered significant equity price falls (-10%, -8%) on weak Chinese demand among other reasons. Credit spreads were helped by a generally strong market and managed small gains.

 

Healthcare

Historical bullets

SPAIN: Junts Side w/Opposition In Blow To Sanchez Gov't

Jan-22 15:02

The pro-Catalan independence Junts teamed up with the main opposition conservative Popular Party (PP) in the Congress of Deputies to deliver a major blow to the coalition gov't of PM Pedro Sanchez. In a 177-171 vote, Junts sided with the opposition to vote down the gov'ts omnibus decree that will halt a planned increase in pension disbursements in line with inflation and cut transport subsidies. 

  • The opposition has previously criticised the gov'ts frequent inclusion of a wide range of issues in its decrees, which it says makes it impossible to support. The specific measure, among the 100+ included in the decree, that the PP objected to related to the transfer of a building housing the Instituto Cervantes in Paris to the Basque Nationalist Party.
  • Justice and Presidency Minister Felix Bolanos said following the vote that when pensions do not increase in line with inflation "let them remember that it was the PP accompanied by others. [...] when public transport users see that the price of their ticket has increased, let them remember that it was the PP accompanied by others,"
  • Catalan News reports "There is growing discontent within Junts over what they see as a failure of the Spanish government to fully implement the agreements reached between them,"
  • Should Junts vote with the opposition in any prospective confidence vote, it would be enough to bring down the Sanchez administration. Current opinion polling shows a right-wing PP-Vox coalition as the most likely to hold a majority in a future vote. 

US: House Republican Leaders To Hold Press Conference Shortly

Jan-22 15:01

House Speaker Mike Johnson (R-LA) is shortly due to hold a House Republican leadership press conference at RNC headquarters in Washington, D.C. where he has promised more details on how Congress intends to legislate President Donald Trump's agenda LIVESTREAM.

  • A series of meetings between President Trump and Republican leaders at the White House yesterday appear to have done little to resolve a dispute between the two chambers over the best strategy for reconciliation – the process by which the governing party can pass legislation along party lines. The public standoff indicates that, beyond the political theatre of Trump’s post-inaugural flurry of executive orders, the Republican-controlled Congress is no closer to determining the best way to push Trump’s agenda through the narrowest House majority since 1931.
  • Johnson and Senate Majority Leader John Thune (R-SD) both struck a positive tone after the White House meetings, but their comments suggested that a firm agreement hasn’t yet been struck, with Johnson continuing to back a single huge reconciliation bill to cover the bulk of Trump’s agenda and Thune advocating dividing the agenda into two packages. While Trump has offered public support for the one-bill strategy (one big beautiful bill), his backing hasn’t been forceful enough to crystalise a strategy. 

US: Rubio's Quad Meetings Suggest Trump Continuity In Indo-Pacific Strategy

Jan-22 14:53

Secretary of State Marco Rubio yesterday held his first meetings at the State Department, convening a conflab of Indo-Pacific ‘Quad’ foreign ministers. The prioritisation of the Indo-Pacific dialogue alliance indicates continuity with the Biden administration in multilateral partnership with Japan, India, and Australia. 

  • Rubio also met bilaterally with his three counterparts and acknowledged the importance of the next Quad Leaders’ Summit, to be hosted by India in September.
  • The State Department said in a readout, tracking closely with previous Biden administration statements, that the four ministers reaffirmed their, “shared commitment to strengthening a Free and Open Indo-Pacific where the rule of law, democratic values, sovereignty, and territorial integrity are upheld and defended.”
  • A Japanese spokesperson told reporters: “This is a very good example that we can continue this kind of minilateral or multilateral cooperation under the second Trump administration,”
  • Trump’s National Security Advisor, Mike Waltz, also met with Japanese Foreign Minister Takeshi Iwaya yesterday, potentially starting discussions on a Trump meeting with Prime Minister Shigeru Ishiba in February -  a priority for Tokyo.
  • The State Department noted that in his meeting with Indian counterpart, Subrahmanyam Jaishankar, Rubio, “emphasized the Trump Administration’s desire to work with India to advance economic ties and address concerns related to irregular migration,” signalling that the Trump administration is likely to target immigration reform from New Delhi in return for ratcheting up economic cooperation.