EU HEALTHCARE: Viatris (VTRS: Baa3/BB+/BBB) Q1 25
Prioritising returns to shareholders. Not a surprise given the problems in Indore following FDA warning letter. Results were OK but creditors will not be pleased with the emphasis on shareholder returns.
• Total Revenue $3.254bn -11% reported but -2% when adjusted for divestiture of OTC business to Cooper
• Adj EBITDA $923m (-12%) ; FCF $535m (-13%)
• Brands increased Adj Sales by +3% to $2.1bn
• Generics fell 11% to $1.1bn impacted by Indore outage
• Reaffirms commitment to returning capital to shareholders. YTD has paid $450m to shareholders in dividends and share buybacks
• Guidance more or less unchanged. Total revenue $13,75bn; Adj EBITDA $4.04bn (down 10m); FCF $2bn
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Historical bullets
EU-BOND SYNDICATION: Dual-tranche: 2.625% Jul-28 / 2.50% Oct-52: Allocations
2.625% Jul-28 EU-bond (EU000A4D5QM6)
- Spread earlier set at MS+14bps (Guidance was MS+15 bps area)
- Size confirmed at E5bln (MNI had expected E4-6bln)
- Books closed in excess of E41bln (in E5.5bln JLM interest)
- HR 106% vs 2.40% Apr-28 Bobl
2.50% Oct-52 EU-bond (EU000A3K4DT4)
- Spread set at MS+126bps (Guidance was MS+128 bps area
- Size: E3bln versus guidance of E2bln (MNI had expected E4-6bln)
- Books closed in excess of E45bln (in E5bln JLM interest)
- HR 119% vs 0% Aug-52 Bund
For both:
- Settlement: 15 April 2025 (T+5)
- Bookrunners: BNP Paribas, Deutsche Bank, J.P. Morgan, Natixis and Nomura
- Timing: Hedge deadline 12:25BST / 13:25CET. Pricing to follow
From market source
EQUITIES: EU Bank put spread vs call
SX7E (17th Apr) 155/150ps vs 171c, bought the ps for 0.25 in ~7.2k.
US TSYS: Modestly Bull Steeper On Headline Watch
- Treasuries sit reasonably firmer on the day, although that’s only broad consolidation of yesterday’s bear steepening as they await a next material headline driver.
- Markets are likely to be on headline watch although later on, 3Y supply will prove an interesting test of demand in current volatility before SF Fed’s Daly speaks in her first remarks since Apr 2 tariff announcements.
- The steepening theme continues. Cash yields are 1-4bp lower as 30s lag with underperformance building on yesterday’s large shift steeper at the Asia open.
- 2s10s sits at 43bp (+0.5bp) as it holds near yesterday’s 45bps at fresh highs since May 2022.
- TYM5 trades at 112-02 (unch) in a relatively narrow range of 18+ ticks after yesterday’s huge 114-10 to 111-15+. Cumulative volumes have again been elevated at above 700k although down from particularly active recent overnight sessions.
- Yesterday’s low of 111-15+ marks new support with the pullback deemed corrective. Resistance is seen at 112-29 (50% of Apr 7 high/low range) after which lies that 114-10.
- Data: NFIB Mar – already released, see “US DATA: Small Business Optimism Reverses Further, Price Plans Drifting Higher”
- Fedspeak: SF Fed’s Daly on economic outlook (1400ET, Q&A only) - see STIR
- Coupon issuance: US Tsy $58B 3Y Note auction - 91282CMW8 (1300ET)
- Bill issuance: US Tsy $70B 6W Bill auction (1130ET)
