8-KMaterial AgreementsFinancial EventsExhibits & Filings

STRYKER CORP 8-K Report, Material Agreement (May 1, 2014)

Filed May 1, 2014For Securities:SYK

Summary

Stryker Corporation (SYK) has filed an 8-K report detailing the successful completion of a public offering of senior notes on May 1, 2014. The offering comprised $600 million in 3.375% notes due 2024 and $400 million in 4.375% notes due 2044, totaling $1 billion in aggregate principal amount. The net proceeds, estimated at $983.9 million after fees, are earmarked for refinancing existing debt, including commercial paper and 3.00% notes due January 15, 2015, as well as for general corporate purposes such as working capital, acquisitions, and stock repurchases. The company entered into an underwriting agreement with Barclays Capital Inc., Goldman, Sachs & Co., and Wells Fargo Securities, LLC. The notes are governed by an indenture, as supplemented by new indentures for each note issuance. The issuance of these notes constitutes a direct financial obligation for Stryker. This offering provides Stryker with significant capital to manage its debt profile and pursue strategic growth initiatives.

Key Highlights

  • 1Stryker Corp. successfully closed a $1 billion public offering of senior notes on May 1, 2014.
  • 2The offering consisted of $600 million in 3.375% notes due 2024 and $400 million in 4.375% notes due 2044.
  • 3Net proceeds from the offering are approximately $983.9 million.
  • 4Proceeds will be used for refinancing existing debt, including $200 million in commercial paper and 3.00% notes due January 2015.
  • 5Funds will also support working capital, potential acquisitions, stock repurchases, and other general corporate purposes.
  • 6The notes were issued under a shelf registration statement and pursuant to an underwriting agreement with major financial institutions.
  • 7The indenture includes covenants limiting certain actions and provisions for a change of control offer.

Frequently Asked Questions

The primary purpose of this $1 billion debt issuance was to refinance existing indebtedness, specifically $200 million of commercial paper and all of Stryker's 3.00% notes due January 15, 2015, at their maturity. The remaining proceeds are allocated for working capital and other general corporate purposes, including potential acquisitions and stock repurchases.

Stryker issued $600 million of 3.375% Notes due 2024 and $400 million of 4.375% Notes due 2044. Interest payments are semi-annual, on May 15 and November 15, commencing November 15, 2014. The notes can be redeemed prior to maturity with a make-whole premium, subject to certain dates.

This filing primarily relates to the creation of direct financial obligations for Stryker Corporation in the form of the $1 billion aggregate principal amount of senior notes (the 2024 Notes and 2044 Notes). These notes are governed by a base indenture and two supplemental indentures.

Yes, the indenture includes covenants that restrict Stryker's ability to incur certain liens, engage in sale and leaseback transactions, and undertake significant asset disposals. Additionally, if a change of control event occurs and the notes are downgraded below investment grade by both Moody's and S&P, Stryker will be required to make an offer to repurchase the notes at 101% of their principal amount plus accrued interest.