Summary
Abbott Laboratories (ABT) filed an 8-K on November 23, 2016, to report the entry into a material definitive agreement related to a significant debt offering. On November 22, 2016, Abbott successfully completed the public offering and issuance of $15.1 billion aggregate principal amount of senior notes. These notes have varying maturity dates and coupon rates, ranging from 2.350% due in 2019 to 4.900% due in 2046.
Key Highlights
- 1Abbott Laboratories issued $15.1 billion in senior notes across multiple tranches with maturities from 2019 to 2046.
- 2The primary use of proceeds is to fund the cash consideration for the St. Jude Medical acquisition and related expenses.
- 3The offering was conducted under a pricing agreement dated November 17, 2016, with several major underwriters.
- 4The notes were issued pursuant to a prospectus supplement and a previously filed shelf registration statement.
- 5A special mandatory redemption clause is included for certain notes (2019, 2023, 2026, 2036, 2046) if the St. Jude Medical acquisition does not close by December 31, 2017, or is not pursued.
- 6The 2021 notes are excluded from the special mandatory redemption provision.
- 7The filing incorporates by reference the indenture and forms of the notes as exhibits.
Frequently Asked Questions
The primary purpose of this significant debt issuance was to secure funding for the cash consideration required for Abbott's acquisition of St. Jude Medical, as well as to cover related expenses and for general corporate purposes.
Abbott issued six series of senior notes totaling $15.1 billion. These include 2.350% Notes due 2019, 2.900% Notes due 2021, 3.400% Notes due 2023, 3.750% Notes due 2026, 4.750% Notes due 2036, and 4.900% Notes due 2046. Specific details on principal amounts and interest rates for each series are available in the filing.
If the St. Jude Medical acquisition does not close by December 31, 2017, or if Abbott decides not to pursue it, Abbott is obligated to redeem specific series of these notes (2019, 2023, 2026, 2036, and 2046) at a premium of 101% of the principal amount, plus accrued interest. The 2021 Notes are not subject to this special mandatory redemption.
The offering was made under a pricing agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., and Morgan Stanley & Co. LLC, acting as representatives for themselves and other underwriters.