EU HEALTHCARE: Healthcare: Week in Review

A strong week with spreads 5bps tighter on average. Despite all the noise around Bund moves, the market did still reward good news stories but had little time for Viatris. Sanofi was the only issuer: it’s 6yr came before the bund move and tightened 9bps in secondary vs the benchmark. Glaxo chose to issue a 4-tranche in USD even though EUR looked favourable.

• Viatris continued its sell-off. USD 30s are screening +38bps wider since pre-results and the S&P cut. EUR 32s are +31bps in that period.
• Bayer had a boost on Friday with the company asking shareholders to approve the option to raise a further 35% of equity capital should litigation expenses become burdensome. Whilst it is concerning that legal liabilities should still be such a worry; it does show a willingness to shift the cost away from debt holders. Bonds were 9bps better.
• Smith & Nephew was in the news again as The Times reported that the CFO had discussed spinning off the orthopaedics division during a analysts’ breakfast. We do not see any protection from this in the docs.
• Fresenius SE raised €1.1bn through a stake sale in Fresenius Medical. FREGR will retain 25% +1 share. Bonds around 9 tighter.
• Fitch has changed how it accounts for leases at Eurofins. This results in a 0.6x improvement in leverage.