Summary
Stryker Corporation (SYK) announced on November 23, 2020, the completion of a $600 million public offering of 0.600% Notes due 2023. The company expects to receive net proceeds of approximately $596 million. These funds are earmarked for general corporate purposes, with a specific mention of potential use in redeeming convertible debt assumed from the acquisition of Wright Medical Group N.V. The new debt carries a relatively low interest rate of 0.600% and matures on December 1, 2023. The indenture governing the notes includes covenants that restrict Stryker's ability to incur certain liens and engage in sale and leaseback transactions. Importantly, the company will be required to offer to repurchase the notes at 101% of the principal amount if a change of control occurs and the notes are downgraded below investment grade by both Moody's and S&P within a specified timeframe.
Key Highlights
- 1Stryker raised $600 million through a public offering of 0.600% Notes due 2023.
- 2Net proceeds are expected to be approximately $596 million.
- 3Proceeds may be used for general corporate purposes, including the redemption of Wright Medical Group N.V. convertible debt.
- 4The Notes mature on December 1, 2023, with a coupon rate of 0.600%.
- 5The company has the option to redeem the Notes prior to December 1, 2021, with a make-whole premium.
- 6The Indenture includes covenants limiting liens, sale and leaseback transactions, and asset disposals.
- 7A change of control provision requires a put option for noteholders if the notes are also downgraded below investment grade.