Summary
Medtronic plc (MDT) filed an 8-K on July 2, 2019, detailing a significant debt offering by its subsidiary, Medtronic Global Holdings S.C.A. The company issued approximately €4.9 billion in various tranches of senior notes, including both floating rate and fixed rate notes with maturities ranging from 2021 to 2049. This offering was conducted under a previously filed registration statement and aims to fund previously announced tender offers for existing debt. The proceeds from this offering are primarily earmarked for repurchasing outstanding notes from Medtronic, Inc., Medtronic Luxco, and Covidien International Finance S.A., with any remaining funds allocated to other indebtedness and general corporate purposes. The company anticipates these transactions to be leverage neutral and potentially lead to lower interest expenses in fiscal year 2020, though the exact financial impact will be determined after the tender offers conclude.
Key Highlights
- 1Medtronic Luxco issued approximately €4.9 billion in aggregate principal amount of senior notes across multiple series (Floating Rate Notes due 2021, and Fixed Rate Notes due 2022, 2025, 2031, 2039, and 2049).
- 2The offering was conducted through an underwritten offering pursuant to a registration statement on Form S-3.
- 3Net proceeds of approximately €4.9 billion will be used to fund tender offers for existing notes issued by Medtronic entities and Covidien International Finance S.A.
- 4Any remaining proceeds from the notes offering will be used for repayment of other indebtedness and general corporate purposes.
- 5Medtronic plc and Medtronic, Inc. are providing full and unconditional guarantees for the issued notes.
- 6The company expects the debt issuance and tender offers to be leverage neutral.
- 7Medtronic anticipates the transactions may result in lower fiscal year 2020 interest expense, though the full financial impact depends on the tender offer results.