Walgreens jumbo bond attracts around US$40bn of demand

(ADDS order books, guidance, details)

By Danielle Robinson and Mike Gambale

NEW YORK, Nov 6 (IFR) - US drug store giant Walgreens pulled

in price guidance Thursday as much as 25bp on its jumbo

seven-tranche acquisition financing bond after attracting around

US$40bn of demand.

Market sources said the issuer, rated Baa2 by Moody's and

BBB by S&P, may look to raise up to US$8bn from the deal, after

earlier indicating the bond would be in the US$6bn-US$7bn range.

The trade, which will be followed by euro and sterling

issues expected to be around US$2bn-equivalent in total, will

help fund a US$15.3 financing package for its acquisition of the

remaining stake in UK peer Alliance Boots it doesn't already

own.

It is also lining up US$5bn-equivalent of loans.

At US$8bn, the dollar deal would be the biggest acquisition

bond in the US investment-grade bond market this year, just

above Bayer (Milan: BAY.MI - news) 's US$7bn six-tranche trade in August.

The trade consists of three-, five-, seven-, 10-, 20- and

30-year fixed-rate bonds as well as an 18-month floating-rate

note.

Walgreens dropped plans for a three-year floater.

Active bookrunners on the trade - Bank of America Merrill

Lynch, Deutsche Bank (Xetra: 514000 - news) , Goldman Sachs (NYSE: GS-PB - news) and Morgan Stanley (Xetra: 885836 - news) - are

expected to price it later on Thursday.

Passive books are HSBC, JP Morgan and Wells Fargo (Swiss: WFC.SW - news)

Securities.

TRANCHE SIZE MATURITY IPTs GUIDANCE

18m FRN bnchmrk 5/18/2016 3mL+50a 3mL+45-50

3-year bnchmrk 11/17/2017 T+100bpa T+80-85

5-year bnchmrk 11/18/2019 T+125a T+105-110

7-year bnchmrk 11/18/2021 T+145a T+125-130

10-year bnchmrk 11/18/2024 T+160a T+145-150

20-year bnchmrk 11/18/1934 T+170a T+145-150

30-year bnchmrk 11/18/1944 T+187.5a T+170-175

(Reporting by Danielle Robinson, Mike Gambale, Anthony

Rodriguez and John Balassi; Editing by Natalie Harrison and Marc

Carnegie)