Summary
This 8-K filing from Tyco International Ltd. (not Johnson Controls International plc, as the filing is for Tyco) on January 10, 2011, reports on a material definitive agreement related to the issuance of new debt. Tyco International Finance S.A. (TIFSA), a subsidiary, entered into an underwriting agreement to sell $500 million in aggregate principal amount of senior notes. Specifically, $250 million of 3.750% Notes due 2018 and $250 million of 4.625% Notes due 2023 were issued. The primary purpose of this debt issuance is to refinance TIFSA's maturing 6.750% Notes due 2011. This move indicates proactive debt management and a strategy to lower interest expenses given the lower coupon rates on the new notes compared to the maturing debt.
Key Highlights
- 1Tyco International Finance S.A. issued $500 million in new notes: $250 million of 3.750% Notes due 2018 and $250 million of 4.625% Notes due 2023.
- 2The issuance was completed through an underwriting agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. Incorporated.
- 3The primary use of proceeds is to repay Tyco's outstanding 6.750% Notes due 2011 upon their maturity.
- 4This refinancing strategy suggests an effort to reduce the company's overall interest expense by replacing higher-coupon debt with lower-coupon debt.
- 5The closing of the note sale was scheduled for January 12, 2011, subject to customary closing conditions.
- 6The filing also includes the underwriting agreement as an exhibit.