Philips successfully prices offering of Notes for EUR 2 billion
Royal Philips (NYSE: PHG) announced the successful pricing of EUR 750 million fixed rate notes due 2027, EUR 650 million Green Innovation Notes due 2029, and EUR 600 million Sustainability Innovation Notes due 2033 under its European Medium Term Note (EMTN) program.
The net proceeds will fund Eligible Projects as per Philips' Green and Sustainability Innovation Bond Framework, with a portion allocated to general corporate purposes. The company plans to optimize its treasury liquidity profile through liability management, including tender offers for outstanding bonds and share buyback programs.
- Successfully priced EUR 2 billion in fixed-rate notes.
- Proceeds will support eligible green and sustainability projects.
- Share buyback program includes cancellation of approximately 28.3 million shares, enhancing shareholder value.
- None.
April 28, 2022
THIS ANNOUNCEMENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION TO SELL, OR ANY SOLICITATION OF AN OFFER TO PURCHASE, ANY SECURITIES OF PHILIPS.
Amsterdam, the Netherlands – Royal Philips (NYSE: PHG, AEX: PHIA), a global leader in health technology, today announced the successful pricing of its issue of EUR 750 million fixed rate notes due 2027 (“2027 Notes”), EUR 650 million Green Innovation Notes due 2029 and EUR 600 million Sustainability Innovation Notes due 2033 (together, the “Notes”) under its European Medium Term Note (EMTN) program (the “EMTN Offering”).
The net proceeds of the Notes will be used for Eligible Projects in accordance with Philips Green and Sustainability Innovation Bond Framework and, in the case of the 2027 Notes, for general corporate purposes. Pending the full allocation of the net proceeds of the Notes, Philips intends to optimize its short-term treasury liquidity profile by applying such net proceeds towards the following liability management transactions which were announced earlier today, all of which are subject to the successful completion of the EMTN Offering:
- A tender offer for certain series of its outstanding U.S. Dollar-denominated bonds due 2025 and 2026;
- A tender offer for certain series of its outstanding Euro-denominated notes due 2023, 2024 and 2025 (the “Euro Tender Offer”);
- The proposed make-whole redemption of any of the Euro-denominated notes due 2023 and 2024 that are not purchased in the Euro Tender Offer (the “Euro Make-Whole Redemption”); and
- The proposed agreement with the relevant counterparties for early settlement of the outstanding forward contracts entered into in the third quarter of 2021 under the share buyback program for capital reduction purposes announced on July 26, 2021 (the “Early Forward Settlement”). The acquisition of 19,571,218 shares through the settlement of these forward contracts would result in the early completion of the repurchase program. Philips would then expect to cancel a total of approximately 28.3 million shares (including shares acquired through open market purchases in December 2021 and January 2022 under the aforementioned share buyback program) in the course of 2022, representing
3.3% of Philips’ currently outstanding shares.
Any decision by Philips to redeem outstanding bonds in the Euro Make-Whole Redemptions, or to complete the Early Forward Settlement, will depend on various factors at that time.
The issue price for the 2027 Notes is
Settlement and issue of the Notes is scheduled for 5 May 2022. Application has been made for the Notes to be listed on the Official List of the Luxembourg Stock Exchange and to trading on the regulated market of the Luxembourg Stock Exchange.
For further information, please contact:
Ben Zwirs
Philips Global Press Office
Tel.: +31 6 1521 3446
E-mail: ben.zwirs@philips.com
Derya Guzel
Philips Investor Relations
Tel.: +31 20 5977055
E-mail: derya.guzel@philips.com
About Royal Philips
Royal Philips (NYSE: PHG, AEX: PHIA) is a leading health technology company focused on improving people's health and well-being, and enabling better outcomes across the health continuum – from healthy living and prevention, to diagnosis, treatment and home care. Philips leverages advanced technology and deep clinical and consumer insights to deliver integrated solutions. Headquartered in the Netherlands, the company is a leader in diagnostic imaging, image-guided therapy, patient monitoring and health informatics, as well as in consumer health and home care. Philips generated 2021 sales of EUR 17.2 billion and employs approximately 78,000 employees with sales and services in more than 100 countries. News about Philips can be found at www.philips.com/newscenter.
Forward-looking statements
This release contains certain forward-looking statements with respect to the financial condition, results of operations and business of Philips and certain of the plans and objectives of Philips with respect to these items. Examples of forward-looking statements include statements made about the EMTN Offering, the USD Tender Offer, the Euro Tender Offer, the Euro Make-Whole Redemption and the Early Forward Settlement. By their nature, these statements involve risk and uncertainty because they relate to future events and circumstances and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these statements.
Important Information
This announcement is for informational purposes only and does not constitute or form part of any offer or invitation to sell, or any solicitation of an offer to purchase, any securities of Philips. The securities offered in the EMTN Offering have not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Neither the EMTN Offering nor the Euro Tender Offer is being made and will not be made directly or indirectly in or into, or by use of the mails of, or by any means or instrumentality (including, without limitation, facsimile transmission, telex, telephone, email and other forms of electronic transmission) of interstate or foreign commerce of, or any facility of a national securities exchange of, or to owners of the subject securities who are located or resident in the United States or to U.S. Persons as defined in Regulation S of the Securities Act.
In the United Kingdom, this announcement is being distributed to, and is directed at, only (a) persons who have professional experience in matters relating to investments who fall within the definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”); or (b) high net worth companies, and other persons to whom it may otherwise lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). The Notes are available only to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such Notes will be available only to or will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this announcement or any of its contents.
Manufacturer target market (MIFID II and UK MiFIR product governance) is eligible counterparties and professional clients only (all distribution channels). No PRIIPs or UK PRIIPs key information document (KID) has been prepared as not available to retail in EEA or UK.
FAQ
What is the significance of Philips' announcement on April 28, 2022?
What are the terms of the fixed-rate notes announced by Philips?
How will Philips use the proceeds from the EMTN Offering?
What is the impact of the EMTN Offering on Philips' share buyback program?
When is the settlement date for the Notes issued by Philips?
