Summary
Eli Lilly & Co. (LLY) announced on August 9, 2005, the completion of a significant financing transaction through its indirect wholly-owned subsidiary, Eli Lilly Services, Inc. This subsidiary issued and sold $1.5 billion in aggregate principal amount of 13-Month Floating Rate Extendible Notes. Eli Lilly and Company itself provided a full and unconditional guarantee for the principal and interest payments on these notes. The proceeds from this offering are intended to be loaned to Eli Lilly S.A., an international operating subsidiary, to fund dividends ultimately paid to the parent company. The company plans to utilize these funds for general corporate purposes, in alignment with the American Jobs Creation Act of 2004. The notes were offered and sold to "qualified institutional buyers" under Rule 144A, indicating a private placement not registered under the Securities Act of 1933.
Key Highlights
- 1Eli Lilly & Co. raised $1.5 billion through the issuance of 13-Month Floating Rate Extendible Notes by its subsidiary, Eli Lilly Services, Inc.
- 2The company provided a full and unconditional guarantee for the notes.
- 3Proceeds are intended to fund dividends to the parent company for general corporate purposes, consistent with the American Jobs Creation Act of 2004.
- 4The notes are designed for qualified institutional buyers and were offered under Rule 144A, meaning they were not publicly registered.
- 5The notes have an initial maturity date of September 1, 2006, but holders have the option to extend maturity up to September 1, 2010.
- 6Interest on the notes is floating, initially set at 3.53% and subsequently based on LIBOR plus a margin that varies by period.
- 7The company retains the option to redeem the notes in whole or in part on specific quarterly dates starting September 2006.