Boston Scientific Corp. (NYSE:BSX) shareholders can breathe a little easier now that they know the company can pay the vig.
The Natick, Mass.-based medical device monolith upgraded its $1.75 billion credit line with a pair of new credit arrangements worth $3 billion, saying it will use the new credit arrangements to pay off the $1.75 billion it owes next year.
Boston Scientific said it replaced its former credit facility, set to mature in April 2011 with a $2 billion, three-year revolving credit facility it said will go toward repaying $850 million worth of senior notes that come due in January 2011 and June 2011. The company also took out a $1 billion, three-year term loan it plans to use to immediately pay off a $900 million term loan it owes Abbott Laboratories (NYSE:ABT), ahead of its due date next April.
BSX had about $5.40 billion in net debt as of March 31, according to a regulatory filing, with $1.75 billion coming due in 2011, $600 million due in 2014 and $3.60 billion due thereafter. CFO Jeff Capello said in prepared remarks that the new arrangements take care of the nut due next year, leaving Boston Scientific "with minimal debt obligations for the next three years."
It’s the latest refinancing move aimed at reducing a mountain of debt facing the company. BSX issued more than $2 billion on senior unsecured notes late last year, consisting of $850 million of 4.5 percent notes due January 2015, $850 million of 6.00 percent notes due January 2020 and $300 million of 7.375 percent notes due January 2040. Boston Scientific used the offering to pay off a $2 billion term loan that was also due next April, paring its 2011 nut down to the $1.75 billion it will now pay off.
BSX shares were up 1.32 percent in after-hours trading June 23, to $6.12, from a $6.03 open.