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THERMO FISHER SCIENTIFIC INC. 8-K Report, Material Agreement (Aug 10, 2023)

Filed August 10, 2023For Securities:TMO

Summary

Thermo Fisher Scientific Inc. (TMO) has announced a significant debt offering, issuing a total of $2.95 billion in aggregate principal amount of Senior Notes across four tranches with varying maturity dates and interest rates. These notes include $600 million of 4.953% Senior Notes due 2026, $750 million of 4.977% Senior Notes due 2030, $1 billion of 5.086% Senior Notes due 2033, and $600 million of 5.404% Senior Notes due 2043. The company has also entered into cross-currency swaps totaling $2.95 billion. The primary stated use of the net proceeds, estimated at approximately $2.92 billion after expenses, is to redeem outstanding Floating Rate Senior Notes maturing in October 2023 and October 2024, totaling $1 billion. The remaining proceeds are earmarked for general corporate purposes, which may include acquisitions, debt repayment, working capital, capital expenditures, equity repurchases, or temporary investments. The issuance of these new notes adds to the company's long-term debt structure and is governed by an indenture with standard covenants related to liens, sale and lease-back transactions, and mergers or consolidations.

Key Highlights

  • 1Thermo Fisher Scientific Inc. (TMO) issued $2.95 billion in aggregate principal amount of Senior Notes through a public offering.
  • 2The notes are comprised of four tranches with maturities in 2026, 2030, 2033, and 2043, carrying interest rates ranging from 4.953% to 5.404%.
  • 3Approximately $1 billion of the net proceeds will be used to redeem outstanding Floating Rate Senior Notes maturing in October 2023 and October 2024.
  • 4Remaining net proceeds are designated for general corporate purposes, including potential acquisitions, debt refinancing, working capital, and capital expenditures.
  • 5The company entered into $2.95 billion of Japanese yen cross-currency swaps concurrent with the note offering.
  • 6The notes are general unsecured obligations of the company, ranking equally with existing unsecured and unsubordinated debt.
  • 7Covenants in the indenture place restrictions on the company's ability to incur secured debt on principal properties, engage in certain sale and lease-back transactions, and limit mergers or asset sales.

Frequently Asked Questions

Thermo Fisher Scientific issued a total of $2.95 billion in aggregate principal amount of Senior Notes across four different tranches.

Approximately $1 billion of the net proceeds will be used to redeem existing Floating Rate Senior Notes maturing in October 2023 and October 2024. The remaining proceeds are intended for general corporate purposes, which could include acquisitions, debt repayment, working capital, or capital expenditures.

The new notes have the following maturities and interest rates: $600 million of 4.953% Senior Notes due 2026, $750 million of 4.977% Senior Notes due 2030, $1 billion of 5.086% Senior Notes due 2033, and $600 million of 5.404% Senior Notes due 2043.

The notes are general unsecured obligations of Thermo Fisher Scientific and rank equally with the company's existing and future unsecured and unsubordinated indebtedness. They are effectively subordinated to any secured debt and structurally subordinated to the debt of its subsidiaries.