Summary
McKesson Corporation (MCK) filed an 8-K on February 12, 2009, primarily to disclose the creation of a direct financial obligation. The company successfully completed a public offering of $700 million in aggregate principal amount of senior notes, comprising $350 million of 6.50% notes due February 15, 2014, and $350 million of 7.50% notes due February 15, 2019. These notes are unsecured and unsubordinated obligations of McKesson. The proceeds from this offering are intended for general corporate purposes. The filing also details the terms of the notes, including interest payment dates, maturity dates, and provisions for early redemption. Importantly, the indenture governing these notes includes covenants that limit the company's ability to incur certain liens or enter into sale and leaseback transactions, and also outlines conditions for a change of control offer to repurchase the notes if a downgrade in rating by major credit agencies occurs concurrently.
Key Highlights
- 1McKesson Corporation raised $700 million in aggregate principal amount through a public offering of debt securities.
- 2The offering consisted of $350 million in 6.50% Notes due 2014 and $350 million in 7.50% Notes due 2019.
- 3Proceeds from the note issuance are designated for general corporate purposes.
- 4The notes are unsecured and unsubordinated obligations of McKesson.
- 5The indenture includes covenants restricting liens and sale and leaseback transactions, subject to cure periods.
- 6A change of control provision mandates an offer to repurchase notes at 101% of principal plus accrued interest if a change of control event is coupled with a below-investment-grade rating downgrade by specified agencies.
- 7The offering was conducted under McKesson's automatic shelf registration statement on Form S-3.