What was the primary purpose of this $19 billion note offering?

The primary purpose of the $19 billion senior unsecured notes offering was to fund a portion of the cash consideration required for Bristol-Myers Squibb's acquisition of Celgene Corporation. Any remaining proceeds would be used for general corporate purposes.

What happens to the notes if the Celgene acquisition does not go through?

If the Celgene acquisition is not completed by July 30, 2020, or if Bristol-Myers Squibb decides not to pursue the merger before that date, the company is obligated to redeem all outstanding notes at a special mandatory redemption price. This price is 101% of the aggregate principal amount of the notes, plus any accrued and unpaid interest.

Has Bristol-Myers Squibb secured all the financing for the Celgene acquisition?

This note offering is intended to fund a portion of the cash consideration. The filing indicates that the proceeds, along with cash on hand, have allowed BMY to terminate its previously established $33.5 billion bridge loan commitment. This suggests a significant portion of the financing is secured, but the total financing structure involves multiple components.

What are the maturity dates and interest rates of the new notes?

The notes have a range of maturity dates from 2020 to 2049. Interest rates include floating rates (based on LIBOR plus a spread) for notes due in 2020 and 2022, and fixed rates ranging from 2.550% (2021 notes) to 4.250% (2049 notes) for other tranches.

BMY 8-K: Material Agreements & Financial Events

Summary

Bristol-Myers Squibb Company (BMY) announced on May 16, 2019, the successful completion of a significant private offering of senior unsecured notes, totaling $19 billion. This substantial debt issuance was undertaken to finance a portion of the cash consideration for its previously announced acquisition of Celgene Corporation, expected to close in the third quarter of 2019. The offering includes various tranches of notes with different maturities and interest rates, ranging from floating rate notes to fixed-rate notes with maturities extending up to 2049. Crucially, the notes are subject to a special mandatory redemption clause. If the Celgene acquisition does not close by July 30, 2020, or if BMY decides not to pursue the merger before that date, the company will be required to redeem all outstanding notes at 101% of their principal amount plus accrued interest. This provides a significant layer of protection for noteholders, ensuring they are not left holding debt related to a failed acquisition. The proceeds from this offering, along with other cash sources, have also led to the termination of the company's $33.5 billion bridge loan commitment, reducing immediate reliance on that facility.

Key Highlights

1BMY successfully closed a $19 billion private offering of senior unsecured notes on May 16, 2019.
2Proceeds are primarily intended to fund a portion of the cash consideration for the acquisition of Celgene Corporation.
3The notes are structured with varying maturities (2020-2049) and interest rates, including both fixed and floating rate options.
4A special mandatory redemption provision requires BMY to redeem all notes at 101% of par plus accrued interest if the Celgene acquisition does not close by July 30, 2020.
5The company has terminated its $33.5 billion bridge loan commitment, which was initially intended to finance the Celgene acquisition.
6A Registration Rights Agreement was entered into, obligating BMY to facilitate an exchange offer for the new notes or file a shelf registration statement.

BRISTOL MYERS SQUIBB CO 8-K Report, Material Agreement (May 16, 2019)

Summary

Key Highlights

Frequently Asked Questions