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THERMO FISHER SCIENTIFIC INC. 8-K Report, Material Agreement (Nov 21, 2022)

Filed November 21, 2022For Securities:TMO

Summary

Thermo Fisher Scientific Inc. (TMO) announced on November 21, 2022, the completion of a significant debt financing initiative, raising a total of €1.25 billion and $1.2 billion through public offerings of senior notes. The Euro offering comprised €500 million of 3.200% Senior Notes due 2026 and €750 million of 3.650% Senior Notes due 2034. Concurrently, the USD offering included $600 million of 4.800% Senior Notes due 2027 and $600 million of 4.950% Senior Notes due 2032. The company intends to utilize the net proceeds, totaling approximately €1.24 billion from the Euro offering and $1.19 billion from the USD offering, for general corporate purposes. These purposes may encompass acquisitions, debt repayment, working capital needs, capital expenditures, or share repurchases. The company may also temporarily invest these proceeds in liquid short-term investments.

Key Highlights

  • 1TMO raised a total of €1.25 billion and $1.2 billion in senior note offerings.
  • 2The Euro notes consist of €500 million maturing in 2026 at 3.200% and €750 million maturing in 2034 at 3.650%.
  • 3The USD notes consist of $600 million maturing in 2027 at 4.800% and $600 million maturing in 2032 at 4.950%.
  • 4Net proceeds from the offerings are expected to be approximately €1.24 billion and $1.19 billion.
  • 5Proceeds are earmarked for general corporate purposes, including potential acquisitions, debt refinancing, working capital, and capital expenditures.
  • 6The notes are unsecured general obligations of the company and are effectively subordinated to secured debt and structurally subordinated to subsidiary debt.
  • 7The indentures include covenants restricting certain secured debt incurrence, sale-and-leaseback transactions, and mergers/consolidations.

Frequently Asked Questions

Thermo Fisher Scientific is raising capital for general corporate purposes. This includes funding potential acquisitions, repaying existing debt, supporting working capital needs, financing capital expenditures, or repurchasing the company's own equity securities.

The Euro offering consists of €500 million of 3.200% Senior Notes due 2026 and €750 million of 3.650% Senior Notes due 2034. The USD offering consists of $600 million of 4.800% Senior Notes due 2027 and $600 million of 4.950% Senior Notes due 2032.

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

Yes, both the Euro and USD Notes have provisions for redemption. The company can redeem the notes in whole or in part on or after specific dates (Euro Par Call Dates and USD Par Call Dates) at par. Prior to these dates, redemption is possible at a price determined by a 'make-whole' provision, which includes the present value of remaining payments plus a spread. Additionally, upon a change of control event coupled with a credit rating downgrade, the company may be required to offer to repurchase the notes at 101% of their principal amount.