Summary
Cardinal Health Inc. (CAH) filed an 8-K on June 12, 2017, primarily to disclose two significant financial events. Firstly, the company announced its intent to terminate a previously established commitment letter with Goldman Sachs for a bridge facility. This termination, effective June 13, 2017, suggests that Cardinal Health has secured alternative financing or no longer requires the bridge loan originally intended to support a major acquisition. Secondly, and more critically for investors, the filing details the closing of a substantial debt offering totaling $5.25 billion. This offering comprised various notes with maturities ranging from 2019 to 2047, including fixed-rate and floating-rate instruments. The proceeds from this debt offering are likely to fund the previously announced $6.1 billion acquisition of Medtronic plc's Patient Care, Deep Vein Thrombosis, and Nutritional Insufficiency businesses, as indicated by the reference to Goldman Sachs' role as a financial advisor in that transaction.
Key Highlights
- 1Cardinal Health is terminating a previously arranged bridge facility commitment with Goldman Sachs, effective June 13, 2017.
- 2The company successfully completed a large debt offering totaling $5.25 billion on June 12, 2017.
- 3The debt offering consists of multiple tranches of notes with varying maturities (2019, 2022, 2024, 2027, and 2047) and interest rates.
- 4Specific note issuances include $1 billion in 1.948% notes due 2019 and $1.15 billion in 2.616% notes due 2022.
- 5A significant portion of the debt offering is comprised of 3.410% notes due 2027 ($1.35 billion) and 4.368% notes due 2047 ($600 million).
- 6The debt offering was underwritten by a syndicate of major financial institutions including Goldman Sachs, Merrill Lynch, MUFG Securities Americas, and Wells Fargo Securities.
- 7The substantial proceeds from the debt offering are likely intended to finance the previously announced $6.1 billion acquisition of Medtronic's patient care businesses.