Medtronic announces closing of public offering of €3.0 billion of senior notes

Rhea-AI Summary

Medtronic has closed a €3.0 billion public offering of senior notes. The offering includes €850 million of 3.650% notes due 2029, €850 million of 3.875% notes due 2036, €600 million of 4.150% notes due 2043, and €700 million of 4.150% notes due 2053. The net proceeds, approximately €2.97 billion, will be used for general corporate purposes, including debt repayment. The notes are guaranteed by Medtronic and Medtronic Global Holdings S.C.A. Citigroup, J.P. Morgan, Merrill Lynch, and Mizuho led the offering, with several other firms acting as co-managers.

Positive

• Closed a €3.0 billion public offering of senior notes.
• Net proceeds of approximately €2.97 billion.
• Proceeds will be used for general corporate purposes and debt repayment.
• The notes are fully and unconditionally guaranteed by Medtronic and Medtronic Global Holdings S.C.A.
• Participation of major financial institutions as joint book-running managers and co-managers.

Negative

• The issuance of senior notes increases the company's long-term debt obligation.
• Potential risk of higher interest expenses due to the long-term nature of the notes.

Insights

Financial Analyst

Medtronic's recent public offering of €3.0 billion in senior notes is a significant financial event that has both immediate and long-term implications for investors. The offering comprises four different tranches, each with a specific interest rate and maturity date. The interest rates range from 3.650% to 4.150%, with maturities extending from 2029 to 2053. This type of funding is typically utilized to manage corporate debt, enhance liquidity and finance new projects.

The net proceeds from the offering are approximately €2.97 billion, which the company plans to use for general corporate purposes, including possibly repaying other forms of debt such as commercial paper. This is a strategic move that can help Medtronic stabilize its balance sheet and potentially lower its overall cost of debt by locking in favorable interest rates for longer durations. For investors, this means that Medtronic is taking proactive steps to manage its financial health, which can be a positive signal.

One should also note that the involvement of major financial institutions like Citigroup, J.P. Morgan and Goldman Sachs as joint book-running managers indicates strong market confidence in Medtronic's financial standing. However, it's essential to closely monitor how effectively the raised funds are allocated and whether they contribute to the company's growth and stability in the long run. Financial health metrics such as Debt-to-Equity ratio and Interest Coverage Ratio should be observed in upcoming financial reports to gauge the success of this initiative.

Market Research Analyst

From a market perspective, Medtronic's decision to issue senior notes denominated in euros is noteworthy. This approach allows the company to tap into the European investor base, which may offer more favorable borrowing conditions compared to the U.S. market. It also provides diversification of funding sources, which is generally a prudent financial strategy. For investors, this can be seen as a positive indication that Medtronic is leveraging its global presence to optimize its financing strategy.

Furthermore, the specific use of proceeds for general corporate purposes offers flexibility, which can be advantageous in a dynamic market environment. This could include investments in R&D, acquisitions, or other strategic initiatives that could drive future growth. Given Medtronic's broad portfolio of healthcare technologies, effective deployment of these funds can potentially lead to innovations and market expansion, benefitting shareholders in the long term.

However, investors should also be aware of the risks related to currency fluctuations and geopolitical uncertainties that could impact the euro-denominated debt. It's important to assess how Medtronic manages these risks in their financial planning and risk management strategies.

DUBLIN, June 3, 2024 /PRNewswire/ -- Medtronic plc (the "Company") (NYSE: MDT) announced today that its wholly-owned indirect subsidiary, Medtronic, Inc., has closed a registered public offering (the "Offering") of €850,000,000 principal amount of 3.650% senior notes due 2029, €850,000,000 principal amount of 3.875% senior notes due 2036, €600,000,000 principal amount of 4.150% senior notes due 2043, and €700,000,000 principal amount of 4.150% senior notes due 2053 (collectively, the "Notes"). All of Medtronic, Inc.'s obligations under the Notes are fully and unconditionally guaranteed by the Company and Medtronic Global Holdings S.C.A., a wholly-owned subsidiary of the Company and the indirect parent of Medtronic, Inc., on a senior unsecured basis.

The net proceeds from the Offering are approximately €2.97 billion, after deducting underwriting discounts and estimated expenses related to the Offering payable by Medtronic, Inc. The net proceeds of the Offering are expected to be used for general corporate purposes, which may include repayment of outstanding commercial paper and other indebtedness.

Citigroup Global Markets Limited, J.P. Morgan Securities plc, Merrill Lynch International and Mizuho International plc were the joint book-running managers for the Offering, Barclays Bank PLC, Deutsche Bank AG, London Branch, Goldman Sachs & Co. LLC and HSBC Bank plc were the senior co-managers for the Offering, and Drexel Hamilton, LLC, Guzman & Company, Independence Point Securities LLC and Siebert Williams Shank & Co., LLC were the co-managers for the Offering.  The Offering was made by means of a prospectus dated March 3, 2023 and prospectus supplement (together, the "Prospectus"), copies of which may be obtained for free by visiting EDGAR on the U.S. Securities and Exchange Commission website at www.sec.gov. Alternatively, copies of the Prospectus may be obtained by contacting Citigroup Global Markets Limited, toll-free at +1 800 831 9146, J.P. Morgan Securities plc at +44-20 7134-2468 (non-U.S. investors), or J.P. Morgan Securities LLC collect at +1-212-834-4533 (U.S. investors), Merrill Lynch International, toll free at +1 800 294 1322 and Mizuho International plc, at +44 20 7248 3920.

About Medtronic
Bold thinking. Bolder actions. We are Medtronic. Medtronic plc, headquartered in Dublin, Ireland, is the leading global healthcare technology company that boldly attacks the most challenging health problems facing humanity by searching out and finding solutions. Our Mission — to alleviate pain, restore health, and extend life — unites a global team of 95,000+ passionate people across 150 countries. Our technologies and therapies treat 70 health conditions and include cardiac devices, surgical robotics, insulin pumps, surgical tools, patient monitoring systems, and more. Powered by our diverse knowledge, insatiable curiosity, and desire to help all those who need it, we deliver innovative technologies that transform the lives of two people every second, every hour, every day. Expect more from us as we empower insight-driven care, experiences that put people first, and better outcomes for our world. In everything we do, we are engineering the extraordinary.

Forward-Looking Statements

This press release may be deemed to contain forward-looking statements regarding future events that are subject to the safe harbor created under Private Securities Litigation Reform Act of 1995 and other safe harbors under the Securities Act and the Securities Exchange Act of 1934. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but without limitation, statements relating to the expected use of proceeds from the Offering.

You should pay particular attention to the important risk factors and cautionary statements referenced in the "Risk Factors" section of the prospectus related to the offering referenced above, as well as the risk factors and cautionary statements described in Medtronic plc's filings with the SEC, including the risk factors contained in Medtronic plc's most recent Annual Report on Form 10-K. Medtronic plc does not undertake to update its forward-looking statements.

Contacts:
Erika Winkels		Ryan Weispfenning
Public Relations		Investor Relations
+1-763-526-8478		+1-763-505-4626

 

 

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SOURCE Medtronic plc

FAQ

What is the total amount raised by Medtronic in the senior notes offering?

Medtronic raised €3.0 billion in its senior notes offering.

What will Medtronic use the proceeds of the offering for?

The proceeds will be used for general corporate purposes, including repayment of outstanding debt.

What are the interest rates and maturities of the senior notes issued by Medtronic?

The notes include €850 million at 3.650% due 2029, €850 million at 3.875% due 2036, €600 million at 4.150% due 2043, and €700 million at 4.150% due 2053.

How much net proceeds did Medtronic receive from the offering after expenses?

Medtronic received net proceeds of approximately €2.97 billion after deducting underwriting discounts and estimated expenses.

Which financial institutions managed Medtronic's senior notes offering?

Citigroup, J.P. Morgan, Merrill Lynch, and Mizuho were the joint book-running managers, with several others acting as co-managers.