Summary
McKesson Corporation (MCK) filed an 8-K on February 13, 2018, primarily to report on the issuance of new debt. The company entered into underwriting agreements to issue and sell a total of €750,000,000 in Euro Notes (comprising Floating Rate Notes due 2020 and 1.625% Fixed Rate Notes due 2026) and $600,000,000 in USD Notes (3.950% Notes due 2028). The Euro Notes were issued on February 12, 2018, while the USD Notes were expected to close on February 16, 2018. These debt offerings are intended to raise capital to finance the purchase of up to $1.1 billion of the Company's outstanding notes. Any remaining proceeds are earmarked for working capital and general corporate purposes, which may include debt repayment. Investors should note the terms of these new debt instruments, including interest rates, maturity dates, redemption provisions, and covenants, as detailed in the filing.
Key Highlights
- 1McKesson issued €750 million in Euro Notes (Floating Rate Notes due 2020 and 1.625% Fixed Rate Notes due 2026).
- 2McKesson issued $600 million in USD Notes (3.950% Notes due 2028).
- 3The issuance of these notes is part of a plan to repurchase up to $1.1 billion of outstanding McKesson notes.
- 4The Floating Rate Notes bear interest at three-month EURIBOR plus 0.15% (with a zero floor), payable quarterly.
- 5The 1.625% Fixed Rate Notes are due in 2026 and bear interest payable annually.
- 6The 3.950% USD Notes are due in 2028.
- 7The Euro Notes are unsecured and unsubordinated debt.
- 8The company may redeem the Fixed Rate Notes prior to maturity with a make-whole premium, and any Euro Notes under specific tax event conditions.