GE (NYSE:GE) announced today that it is offering $8.25 billion in senior notes in connection with its planned spinoff of GE HealthCare.
The spinoff remains on track to take place during the first week of January 2023.
It’s common for companies spinning out of larger parents to start out with debt. For example, spine and dental tech company ZimVie (Nasdaq:ZIMV) started out with $500 million in debt when it spun out of Zimmer Biomet (NYSE:ZBH) early this year.
GE said the notes will be senior unsecured obligations of GE HealthCare and will enable GE to pay down existing debt. Just on Nov. 8, GE announced a tender offer to buy up to $7 billion in its debt securities. After that, it expected new GE HealthCare debt securities to pay down its outstanding debt over time.
The new stand-alone medtech giant intends to maintain a strong investment-grade credit rating.
In a Form 10 registration statement filed with the SEC last month, GE said that GE HealthCare’s debt will include $10.2 billion in senior notes and term loans. In addition, GE said at the time that it expects to transfer $5.2 billion in net pension and other postretirement plan liabilities to the spinoff.
GE HealthCare has brought in $13.5 billion in revenue during the first nine months of 2022. The amount is up 3% from the same period a year ago.
