8-KMaterial AgreementsFinancial EventsExhibits & Filings

STRYKER CORP 8-K Report, Material Agreement (Nov 30, 2018)

Filed November 30, 2018For Securities:SYK

Summary

Stryker Corporation (SYK) announced the completion of a significant public offering of Euro-denominated notes on November 30, 2018. The offering raised a substantial amount of capital through the issuance of €300 million in Floating Rate Notes due 2020, €550 million in 1.125% Notes due 2023, €750 million in 2.125% Notes due 2027, and €650 million in 2.625% Notes due 2030, totaling approximately €2.25 billion. The company expects to receive net proceeds of around $2.527 billion after fees and expenses. The primary use of these proceeds is for general corporate purposes, with specific allocations mentioned for the repayment of maturing debt, including $500 million of 1.800% Notes due January 15, 2019, and $750 million of 2.000% Notes due March 8, 2019. This strategic move aims to manage the company's debt maturity profile and potentially lower borrowing costs. The filing also outlines the terms of the notes, including interest rates, maturity dates, redemption provisions, and covenants that limit certain corporate actions such as incurring liens or engaging in sale-leaseback transactions.

Key Highlights

  • 1Stryker completed a public offering of €2.25 billion in various Euro-denominated notes with maturities ranging from 2020 to 2030.
  • 2Net proceeds from the offering are estimated at approximately $2.527 billion.
  • 3The company intends to use the proceeds for general corporate purposes, notably to repay maturing debt, including $500 million in 1.800% Notes and $750 million in 2.000% Notes.
  • 4The new notes include Floating Rate Notes due 2020 (EURIBOR + 0.28%), 1.125% Notes due 2023, 2.125% Notes due 2027, and 2.625% Notes due 2030.
  • 5The Indenture governing the notes contains covenants that limit the company's ability to incur certain liens, engage in sale-leaseback transactions, and undergo significant asset sales or mergers.
  • 6A change of control provision requires Stryker to offer to purchase the notes at 101% of principal if a change of control occurs and the notes are downgraded below investment grade by two major rating agencies.
  • 7The offering was conducted under Stryker's Automatic Shelf Registration Statement and documented by an Underwriting Agreement with several major financial institutions.

Frequently Asked Questions

The primary purpose of this debt issuance was to raise capital for general corporate purposes, with a specific focus on managing Stryker's debt maturity profile. The proceeds are earmarked for repaying maturing debt, including $500 million of 1.800% Notes due January 15, 2019, and $750 million of 2.000% Notes due March 8, 2019, as well as any outstanding commercial paper. This allows Stryker to refinance upcoming obligations, potentially at more favorable rates or terms.

Stryker issued four series of Euro-denominated notes: €300 million in Floating Rate Notes due 2020 (linked to 3-month EURIBOR plus 0.28%), €550 million in 1.125% Notes due 2023, €750 million in 2.125% Notes due 2027, and €650 million in 2.625% Notes due 2030. Interest payments vary by note series, with most paid annually and the Floating Rate Notes paid quarterly. The notes have various maturity dates from November 2020 to November 2030.

The Indenture governing these notes includes standard covenants that restrict Stryker's ability to incur certain liens, engage in sale-leaseback transactions, and undergo significant asset sales or mergers without offering to purchase the notes. Additionally, a change of control clause protects noteholders by requiring Stryker to offer to repurchase the notes at 101% of their principal amount if a change of control event occurs and the notes are subsequently downgraded below investment grade by both Moody's and S&P within a specified timeframe.

Stryker raised a total of €2,250,000,000 (approximately $2.527 billion after deducting underwriting discounts and expenses) through the public offering of its Euro-denominated notes.