8-KFinancial EventsOther EventsExhibits & Filings

BECTON DICKINSON & CO 8-K Report, Financial Obligation (Feb 22, 2018)

Filed February 22, 2018For Securities:BDX

Summary

Becton, Dickinson and Company (BD) announced on February 22, 2018, the issuance of an additional €300,000,000 in aggregate principal amount of its 0.368% Notes due June 6, 2019. This issuance effectively reopens a previous offering, bringing the total outstanding principal amount of these notes to €1,000,000,000. The company intends to use the net proceeds from this offering to repay $371.1 million outstanding under its revolving credit facility, along with related interest, premiums, fees, and expenses. These Euro Notes carry similar terms to the existing notes, including the potential for redemption under specific tax law changes or upon a Change of Control Triggering Event, where noteholders may require BD to purchase their notes at 101% of the principal amount. The filing also outlines standard events of default and restrictive covenants typically found in such indentures, including limitations on liens and sale-and-leaseback transactions.

Key Highlights

  • 1BD issued an additional €300 million of 0.368% Notes due June 6, 2019.
  • 2The total outstanding principal for these notes now stands at €1 billion.
  • 3Net proceeds will be used to repay $371.1 million from the company's revolving credit facility.
  • 4The Euro Notes are a reopening of existing notes, sharing identical terms except for issue date and price.
  • 5Noteholders have the right to sell notes back to BD at 101% of principal if a Change of Control Triggering Event occurs.
  • 6BD may redeem notes early if tax law changes obligate it to pay additional amounts.
  • 7The indenture includes standard covenants like limitations on liens and sale/leaseback restrictions.

Frequently Asked Questions

The primary purpose of issuing these additional Euro Notes is to repay a significant portion of BD's outstanding revolving credit facility ($371.1 million) and associated costs. This is a strategic move to manage its debt structure and reduce reliance on its credit line.

The Euro Notes have a coupon of 0.368% and mature on June 6, 2019. They are identical to previously issued notes of the same series, meaning they share the same CUSIP, ISIN, and Common Code. The company may be obligated to redeem them under specific tax law changes or if a Change of Control Triggering Event occurs, in which case noteholders can require BD to purchase their notes at 101% of the principal amount.

This issuance will replace short-term debt from the revolving credit facility with longer-term debt in the form of Euro Notes. While it reduces immediate pressure on the revolving credit facility, it increases the company's overall long-term debt. Investors should monitor how BD plans to manage its overall debt obligations and leverage ratios going forward.

Key risks include interest rate risk (though the coupon is fixed), credit risk related to BD's financial health, and event risk. Specifically, a Change of Control Triggering Event allows noteholders to demand early repayment, which could impact BD's liquidity if not managed properly. Additionally, changes in U.S. tax laws could trigger an early redemption by the company.