8-KFinancial EventsExhibits & Filings

BRISTOL MYERS SQUIBB CO 8-K Report, Financial Obligation (Nov 12, 2009)

Filed November 12, 2009For Securities:BMYCELG-RIBMYMP

Summary

Bristol-Myers Squibb Company (BMY) disclosed through its indirect subsidiary, Mead Johnson Nutrition Company (MJN), the issuance of $1.5 billion in aggregate principal amount of notes across three tranches: $500 million of 3.50% Notes due 2014, $700 million of 4.90% Notes due 2019, and $300 million of 5.90% Notes due 2039. These notes are unsecured and guaranteed by Mead Johnson & Company (MJC). The primary purpose of this debt issuance was to partially repay approximately $1.74 billion in intercompany debt owed to a Bristol-Myers Squibb subsidiary. The use of proceeds demonstrates a strategic move by MJN to refinance a significant portion of its internal debt with external financing, thereby potentially altering its capital structure and improving liquidity. The company utilized the net proceeds of approximately $1.48 billion to reduce the intercompany debt, with the remaining balance addressed through a revolving credit facility and cash on hand. This issuance also includes provisions for MJN to offer an exchange for registered notes and potential penalties (additional interest) if certain registration deadlines are not met, indicating a commitment to providing investors with freely tradable securities.

Key Highlights

  • 1Mead Johnson Nutrition Company (MJN), a subsidiary of BMY, issued $1.5 billion in notes.
  • 2The notes are comprised of $500M (3.50% due 2014), $700M (4.90% due 2019), and $300M (5.90% due 2039).
  • 3Proceeds were used to partially repay $1.74 billion in intercompany debt owed to a BMY subsidiary.
  • 4MJN also utilized its revolving credit facility and cash on hand to further reduce intercompany debt.
  • 5The notes are unsecured and guaranteed by Mead Johnson & Company (MJC).
  • 6MJN has agreed to register the notes or offer an exchange for freely tradable notes, with penalties for non-compliance.
  • 7The issuance was conducted under exemptions from registration requirements of the Securities Act of 1933.

Frequently Asked Questions

The primary reason for the issuance of the new notes by Mead Johnson Nutrition Company (MJN) was to raise funds to partially repay approximately $1.74 billion in intercompany debt that MJN owed to a subsidiary of Bristol-Myers Squibb Company. This allows MJN to refinance its intercompany obligations with external debt.

MJN issued three series of notes: $500 million of 3.50% Notes due November 1, 2014; $700 million of 4.90% Notes due November 1, 2019; and $300 million of 5.90% Notes due November 1, 2039. Interest is paid semi-annually, beginning May 1, 2010.

No, the notes are unsecured. They rank equally with MJN's existing and future unsecured senior indebtedness. The notes are guaranteed by Mead Johnson & Company (MJC), a direct wholly-owned subsidiary of MJN.

The Registration Rights Agreement requires MJN to use its best efforts to register the notes for resale with the SEC or offer an exchange for substantially identical, freely tradable notes. If MJN fails to meet specific deadlines for this registration or exchange, it will be obligated to pay additional interest on the notes, which incentivizes MJN to ensure the notes become readily tradable.