Summary
This 8-K filing by Cardinal Health, Inc. (CAH) on July 21, 2009, primarily details a material definitive agreement concerning its subsidiary, CareFusion Corporation. CareFusion successfully closed the sale of $1.4 billion in aggregate principal amount of senior notes, comprising $250 million of 4.125% notes due 2012, $450 million of 5.125% notes due 2014, and $700 million of 6.375% notes due 2019. The offering was conducted as a private placement under exemptions from registration, with proceeds of approximately $1.374 billion being held in escrow. The core purpose of this debt issuance is to fund a special dividend to Cardinal Health in connection with its planned spin-off of CareFusion. Cardinal Health intends to distribute at least 80.1% of CareFusion's outstanding common stock to its shareholders. The proceeds will be released upon the completion of this spin-off. If the spin-off does not occur by November 1, 2009, CareFusion is obligated to redeem these notes at a premium.
Key Highlights
- 1CareFusion, a subsidiary of Cardinal Health, successfully issued $1.4 billion in senior notes across three tranches: 2012, 2014, and 2019 maturities.
- 2The net proceeds from the note offering are approximately $1.374 billion.
- 3The debt issuance is directly linked to Cardinal Health's planned spin-off of CareFusion, with proceeds earmarked for a special dividend.
- 4The notes were sold via a private placement to qualified institutional buyers and non-U.S. persons, relying on exemptions from registration under the Securities Act.
- 5Proceeds are held in escrow and will be released upon the completion of the CareFusion spin-off.
- 6A mandatory redemption of the notes at a 101% premium will occur if the spin-off is not completed by November 1, 2009.
- 7A Separation Agreement was also entered into between Cardinal Health and CareFusion, governing the terms of the spin-off and post-separation relationship.