8-KMaterial AgreementsExhibits & Filings

DANAHER CORP /DE/ 8-K Report, Material Agreement (Sep 15, 2015)

Filed September 15, 2015For Securities:DHR

Summary

Danaher Corporation (DHR) filed an 8-K on September 15, 2015, to report the issuance of $2 billion in aggregate principal amount of senior notes across four tranches: $500 million due in 2018, $500 million due in 2020, $500 million due in 2025, and $500 million due in 2045. These notes carry varying interest rates, ranging from 1.650% for the 2018 notes to 4.375% for the 2045 notes, with semi-annual interest payments commencing in March 2016. This significant debt issuance was conducted under a previously filed registration statement and an underwriting agreement. The terms of the notes include options for Danaher to redeem them under specific conditions, including a 'make-whole' premium before certain dates and at par thereafter. Additionally, a change of control triggering event could require Danaher to repurchase the notes at 101% of their principal amount. The notes are general unsecured obligations, senior to subordinated debt, but effectively subordinated to secured debt and structurally subordinated to subsidiary debt.

Key Highlights

  • 1Danaher issued $2 billion in senior notes across four maturity dates: 2018, 2020, 2025, and 2045.
  • 2The interest rates on the notes range from 1.650% (2018 Notes) to 4.375% (2045 Notes).
  • 3Interest payments are scheduled semi-annually, starting March 15, 2016.
  • 4The company retains the option to redeem the notes early, either at a 'make-whole' premium or at par value depending on the timing.
  • 5A change of control triggering event could force Danaher to repurchase the notes at 101% of their principal amount.
  • 6The notes are unsecured and unsubordinated to other unsecured debt but are effectively subordinated to secured debt and structurally subordinated to subsidiary obligations.

Frequently Asked Questions

The filing does not explicitly state the purpose of the debt issuance. However, large debt issuances are typically used for general corporate purposes, which can include funding acquisitions, capital expenditures, refinancing existing debt, or strengthening the balance sheet.

This clause protects noteholders. If a change of control (as defined in the indenture) occurs and is coupled with a rating event, holders can demand that Danaher repurchase their notes at a premium (101% of principal) plus accrued interest. This mitigates the risk of debt value decline due to significant ownership or strategic changes.

This issuance increases Danaher's total debt by $2 billion. As the notes are general unsecured obligations, they rank equally with existing unsecured and unsubordinated debt. Investors should note the effective subordination to secured debt and structural subordination to subsidiaries' debt, meaning these notes would be lower in priority for repayment in a liquidation scenario concerning secured assets or subsidiaries.

This 8-K filing focuses on the entry into the material definitive agreement (the Underwriting Agreement and the related Indenture). While it mentions events of default (payment defaults, covenant breaches, bankruptcy), it does not detail specific ongoing covenants or restrictions on Danaher's operations or financial ratios, which would typically be found in the full indenture document.