Thermo Fisher Launches Four-Part Bond Offering Ahead Of Possible Government Shutdown

Thermo Fisher Scientific Inc. (TMO) is tapping the U.S. investment-grade bond market with a four-part, dollar-denominated offering, as companies move to secure funding ahead of a potential U.S. government shutdown.

Citing sources familiar with the matter, Bloomberg noted that the longest tranche of the sale ?a 12-year security ?could yield about one percentage point above Treasuries.

The proceeds are earmarked for general corporate purposes, which may include acquisitions, debt repayment, working capital, capital expenditures, or share repurchases, the source told Bloomberg.

On Monday, five issuers collectively raised $4.5 billion, pushing the month's total issuance past $200 billion. This marks the second strongest month for U.S. investment-grade issuance outside the Covid-19 pandemic period.

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The average yield-to-worst for investment-grade debt declined three basis points to 4.81% on Monday. Meanwhile, the average corporate bond spread tightened by one basis point to 73 basis points, hovering just one basis point above a record low.

On Monday, the Centers for Medicare & Medicaid Services noted that critical services for Medicare and Medicaid would not be affected by a shutdown. However, the agency would not have funding to provide oversight to contractors, including those who administer the Medicare call centers.

Concurrently, on Tuesday, Vaxcyte, Inc (PCVX). announced a new agreement with Thermo Fisher Scientific (TMO) to bring additional fill-finish commercial manufacturing for Vaxcyte’s broad-spectrum pneumococcal conjugate vaccines (PCVs) to the United States.

Thermo Fisher will provide custom commercial fill-finish capacity for Vaxcyte’s broad-spectrum PCVs at its Greenville, North Carolina facility. The initiative, including manufacturing and related services, signifies a long-term U.S. commercial manufacturing commitment for Vaxcyte (PCVX), representing up to $1 billion.

“The decision to significantly expand our fill-finish manufacturing capacity in the United States represents an effort to expand our end-to-end supply strategy and align with the increasing focus on domestic biomanufacturing,” said Grant Pickering, CEO and co-founder of Vaxcyte (PCVX). “By scaling our fill-finish operations in North Carolina, we’re strengthening our U.S. supply chain, enhancing commercial readiness and deepening our investment in American innovation, infrastructure and jobs.”

Price Action: TMO stock is up 0.58% at $464.71 at the last check on Tuesday.

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