Summary
Medtronic plc (MDT) announced on May 2, 2022, through its subsidiary Medtronic Global Holdings S.C.A., the entry into a 364-day unsecured term loan agreement with Mizuho Bank, Ltd. for up to JPY 300,000,000,000 (approximately $2.3 billion USD based on exchange rates at the time). This facility, which was undrawn at closing, is intended to fund general corporate purposes, specifically the redemption of Medtronic's outstanding $1,900 million 3.500% Senior Notes due 2025 and Medtronic Luxco's $368 million 3.350% Senior Notes due 2027. The company expects these debt refinancing actions to positively impact its fiscal year 2023 interest expense, although this benefit will be partially offset by increased U.S. tax expenses and a generally higher global interest rate environment. Investors should note that the redemption dates for these notes are set for May 17, 2022, and June 1, 2022, respectively. Medtronic plans to provide updated financial guidance for FY2023 during its upcoming Q4 FY2022 earnings call.
Key Highlights
- 1Medtronic plc subsidiary entered into a JPY 300 billion unsecured term loan agreement with Mizuho Bank, Ltd.
- 2The loan has a 364-day term and was undrawn at the time of the filing.
- 3Proceeds are earmarked for the redemption of $1.9 billion of Medtronic, Inc. Senior Notes due 2025 and $368 million of Medtronic Luxco Senior Notes due 2027.
- 4The redemption dates are May 17, 2022, for the 2027 notes and June 1, 2022, for the 2025 notes.
- 5The company anticipates a beneficial impact on FY2023 interest expense.
- 6Increased U.S. tax expense and a higher interest rate environment are expected to partially offset the interest savings.
- 7Medtronic will provide FY2023 guidance on its upcoming Q4 FY2022 earnings call.