Summary
Danaher Corporation (DHR) filed an 8-K on June 23, 2011, to report the issuance of a significant amount of debt. The company issued $1.8 billion in aggregate principal amount of senior notes. This debt offering includes $300 million in Floating Rate Senior Notes due 2013 and $1.5 billion in fixed-rate senior notes across three tranches: $400 million due 2014, $500 million due 2016, and $600 million due 2021. The purpose of this debt issuance is likely to fund corporate activities, potentially including the previously announced acquisition of Beckman Coulter, as indicated by specific redemption clauses tied to that transaction's completion.
Key Highlights
- 1Danaher issued $1.8 billion in aggregate principal amount of Senior Notes on June 23, 2011.
- 2The debt issuance comprises $300 million of Floating Rate Senior Notes due 2013 (3-month LIBOR + 0.25%) and $1.5 billion in fixed-rate notes.
- 3Fixed-rate notes include $400 million due 2014 at 1.300%, $500 million due 2016 at 2.300%, and $600 million due 2021 at 3.900%.
- 4The notes are general unsecured obligations, senior to subordinated debt but effectively subordinated to secured debt and structurally subordinated to subsidiary debt.
- 5The issuance contains provisions for a special mandatory redemption if the Beckman Coulter acquisition is not consummated by December 31, 2011, requiring a redemption at 101% of principal.
- 6A change of control triggering event (defined as a change of control and a rating event) allows noteholders to require repurchase at 101% of principal.
Frequently Asked Questions
Danaher issued a total of $1.8 billion in aggregate principal amount of Senior Notes across multiple tranches.
The Floating Rate Notes mature in 2013 with interest at 3-month LIBOR + 0.25%. The fixed-rate notes mature in 2014 (1.300%), 2016 (2.300%), and 2021 (3.900%).
The filing indicates that if the Beckman Coulter acquisition is not completed by December 31, 2011, Danaher will be required to redeem all of the issued notes at a premium (101% of principal). This suggests the debt issuance may be partially or wholly contingent on the successful completion of this acquisition.
The notes are general unsecured obligations of Danaher. They are senior to any existing or future subordinated indebtedness but effectively subordinated to any secured indebtedness and structurally subordinated to debt and liabilities of Danaher's subsidiaries.