8-KMaterial AgreementsExhibits & Filings

THERMO FISHER SCIENTIFIC INC. 8-K Report, Material Agreement (Oct 8, 2019)

Filed October 8, 2019For Securities:TMO

Summary

Thermo Fisher Scientific Inc. (TMO) announced on October 8, 2019, the successful issuance of $900 million in aggregate principal amount of 2.600% Senior Notes due 2029. This offering complements a significant Euro Offering completed on September 30, 2019, which raised €4.6 billion across multiple tranches with varying maturities and coupon rates. The proceeds from these debt issuances are primarily earmarked for refinancing existing debt, including the redemption of several tranches of senior notes totaling approximately $4.5 billion, as well as commercial paper issued to fund prior redemptions. These notes are unsecured and rank equally with the company's existing unsecured and unsubordinated debt, while being effectively subordinated to secured debt and structurally subordinated to debt at subsidiaries. The indenture includes limited covenants restricting the company's ability to incur secured debt on principal properties or engage in certain sale-leaseback transactions, and also limits merger and asset sale activities. This strategic refinancing aims to optimize the company's capital structure and manage its debt maturity profile.

Key Highlights

  • 1Issuance of $900 million in 2.600% Senior Notes due October 1, 2029.
  • 2Proceeds to be used for refinancing existing debt and funding redemptions of other senior notes.
  • 3Complements a large Euro Offering (€4.6 billion) of senior notes completed earlier.
  • 4Notes are unsecured and rank equally with other unsecured and unsubordinated debt.
  • 5Effectively subordinated to secured debt and structurally subordinated to subsidiary debt.
  • 6Indenture includes covenants limiting secured debt, sale-leaseback transactions, mergers, and asset sales.
  • 7Company may redeem notes prior to maturity under specific conditions, including a 'Par Call' option and a change of control provision.

Frequently Asked Questions

The primary purpose of issuing the new $900 million in senior notes is to refinance existing debt. Specifically, the proceeds, along with cash on hand, will be used to repay commercial paper used for prior note redemptions and to fund the redemption of approximately $4.5 billion of outstanding senior notes from the company and its subsidiaries.

The new $900 million Senior Notes due 2029 carry a fixed interest rate of 2.600% and will mature on October 1, 2029. Interest payments are scheduled to be made semi-annually.

The new notes are general unsecured obligations of Thermo Fisher Scientific. They rank equally with the company's existing unsecured and unsubordinated indebtedness. However, they are effectively subordinated to any secured indebtedness of the company to the extent of the collateral securing that debt, and are structurally subordinated to all indebtedness and liabilities of its subsidiaries.

Yes, the indenture governing these notes contains limited negative covenants that restrict the company and its subsidiaries from incurring secured debt on certain properties or engaging in specific sale-leaseback transactions. It also limits the ability to merge, consolidate, or sell substantially all assets. The company may also be required to offer to repurchase the notes upon a change of control coupled with a credit rating downgrade.