Summary
Stryker Corporation (SYK) filed an 8-K on January 18, 2017, to report on the successful completion of a public offering of $500 million in aggregate principal amount of 1.800% Notes due 2019. This offering was made under the company's existing shelf registration statement and a prospectus supplement. The net proceeds from this offering are estimated to be approximately $498 million after deducting underwriting discounts and expenses. Stryker intends to utilize these funds for general corporate purposes, including working capital, repayment of commercial paper, potential acquisitions, stock repurchases, and other business opportunities. The company also provided details on the indenture agreement governing the notes, including interest payment dates, maturity, redemption provisions, and covenants that limit certain corporate actions like incurring liens or engaging in sale-leaseback transactions. A change of control provision, coupled with a credit rating downgrade, could trigger a mandatory purchase offer for the notes.
Key Highlights
- 1Stryker Corporation successfully completed a public offering of $500 million in 1.800% Notes due January 15, 2019.
- 2The offering was conducted under an existing Form S-3 shelf registration statement.
- 3Net proceeds are expected to be approximately $498 million after fees and expenses.
- 4Proceeds are earmarked for general corporate purposes, including working capital, debt repayment, acquisitions, and stock repurchases.
- 5The notes bear a fixed interest rate of 1.800% per annum, payable semi-annually.
- 6The indenture includes provisions for redemption and covenants that restrict certain company actions.
- 7A change of control event combined with a credit rating downgrade below investment grade triggers a mandatory offer to purchase the notes at 101% of principal.