What is the primary use of the proceeds from the new notes issued?

The net proceeds from the Floating Rate Senior Notes and the 0.000% Senior Notes due 2023, totaling approximately €2.25 billion, are intended to fund a portion of the cash consideration for the acquisition of PPD, Inc. The net proceeds from the Sustainability Notes, approximately €546.6 million, are designated for financing eligible green or social projects.

What other significant financial action did Thermo Fisher take concurrently?

Thermo Fisher Scientific also announced the redemption of its $1.1 billion 4.133% Senior Notes due 2025 and $1.1 billion 4.497% Senior Notes due 2030, for an aggregate redemption price of approximately $2.2 billion, which will be funded by cash on hand.

What are the terms of the new notes regarding maturity and interest?

The Floating Rate Notes and the 0.000% Senior Notes due 2023 mature on November 18, 2023. The 0.000% Sustainability Notes mature on November 18, 2025. The Floating Rate Notes pay interest quarterly, while the 0.000% notes carry a 0% coupon rate.

Are there any conditions that would require Thermo Fisher to repurchase these new notes?

Yes, upon the occurrence of a 'change of control' of the Company coupled with a downgrade of the notes below investment grade by at least two major rating agencies (Moody's, S&P, or Fitch), Thermo Fisher International will be required to make an offer to purchase the notes at 101% of their principal amount, plus accrued interest.

TMO 8-K: Material Agreements & Regulation FD

Summary

Thermo Fisher Scientific Inc. (TMO) announced a significant financing transaction through its subsidiary, Thermo Fisher International. On November 18, 2021, the company issued a total of €2.8 billion in senior notes. This includes €1.7 billion in Floating Rate Senior Notes due 2023, €550 million in 0.000% Senior Notes due 2023, and €550 million in 0.000% Sustainability Notes due 2025. The company's parent, Thermo Fisher Scientific Inc., fully and unconditionally guarantees these notes. The primary purpose of these new issuances, particularly the Floating Rate Notes and 2023 Notes, is to fund a portion of the cash consideration for the previously announced acquisition of PPD, Inc. Approximately €2.25 billion in net proceeds is earmarked for this acquisition. The Sustainability Notes' net proceeds, estimated at €546.6 million, are intended to finance eligible green or social projects. Additionally, the company announced the redemption of its $1.1 billion 4.133% Senior Notes due 2025 and $1.1 billion 4.497% Senior Notes due 2030, totaling approximately $2.2 billion, which will be funded by cash on hand.

Key Highlights

1Thermo Fisher Scientific Inc. (TMO) subsidiary issued €2.8 billion in senior notes across three tranches: Floating Rate Senior Notes due 2023 (€1.7B), 0.000% Senior Notes due 2023 (€550M), and 0.000% Sustainability Notes due 2025 (€550M).
2The proceeds from the Floating Rate Notes and 2023 Notes, estimated at €2.25 billion, are intended to finance a portion of the acquisition of PPD, Inc.
3Net proceeds of approximately €546.6 million from the Sustainability Notes are designated for financing eligible green or social projects.
4The company is redeeming its $1.1 billion 4.133% Senior Notes due 2025 and $1.1 billion 4.497% Senior Notes due 2030 on December 3, 2021.
5The redemption of the 2025 and 2030 Notes, totaling approximately $2.2 billion, will be funded by existing cash on hand.
6The new notes are guaranteed by the parent company and are senior unsecured obligations, ranking equally with other unsecured and unsubordinated debt.
7The indenture includes covenants restricting the incurrence of secured debt on principal properties and limitations on mergers, consolidations, and asset sales.

THERMO FISHER SCIENTIFIC INC. 8-K Report, Material Agreement (Nov 18, 2021)

Summary

Key Highlights

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