Summary
Cardinal Health, Inc. (CAH) announced the successful private placement of $850 million in aggregate principal amount of notes on October 3, 2006, consisting of $350 million in floating rate notes due 2009 and $500 million in fixed-rate 5.80% notes due 2016. The net proceeds from this offering are estimated to be approximately $844.3 million, which the company intends to use for debt repayment and general corporate purposes. This transaction is significant as it demonstrates Cardinal Health's ability to access capital markets for refinancing and strategic financial management. The issuance, conducted under exemptions from registration, underscores the company's financial flexibility. Investors should note the intended use of proceeds, which primarily targets the repayment of existing debt, including preferred securities and subsidiary notes, indicating a focus on optimizing the company's capital structure.
Key Highlights
- 1Cardinal Health completed a private placement of $850 million in notes (350 million floating rate due 2009 and 500 million fixed rate due 2016).
- 2Net proceeds from the offering are estimated at $844.3 million.
- 3The company plans to use the proceeds primarily to repay $500 million of preferred debt, $127.4 million of subsidiary notes, and $53.1 million from a subsidiary's credit facility.
- 4The offering was made through a private placement under Section 4(2) of the Securities Act and Rule 144A for sales to qualified institutional buyers.
- 5The 2009 Notes will bear interest at a floating rate of three-month LIBOR plus 0.27%, payable quarterly.
- 6The 2016 Notes will bear interest at a fixed rate of 5.80% per year, payable semi-annually.
- 7A registration rights agreement was entered into, requiring the company to file for registration of an exchange offer for the notes within specific timeframes.