Medtronic (NYSE:MDT) announced that its Medtronic Global Holdings S.C.A subsidiary priced an offering of senior notes worth $2 billion.
The financial move comes at the same time that the world’s largest medical device company engages in significant expense reductions. The idea is to boost the company’s resilience against the present macroeconomic headwinds.
The wholly-owned subsidiary — Medtronic Luxco — priced the offering of two different groups of senior notes. The first, with a principal amount of $1 million, includes 4.25% senior notes due in 2028. Medtronic Luxco’s second group of notes features $1 million of 4.5% senior notes due 2023.
According to Medtronic, it intends to fully and unconditionally guarantee all of Medtronic Luxco’s obligations under the notes. The company guarantees this on a senior, unsecured basis.
Medtronic said in a news release that it expects to use proceeds to repay indebtedness. It expects that to include a portion of the outstanding indebtedness under Medtronic Luxco’s Japanese-yen-denominated term loan agreement by and among Medtronic Luxco, Medtronic, and Mizuho Bank, as administrative agent and as the lender and for general corporate purposes.
The company expects the offering to close on March 30, 2023, subject to customary closing conditions. J.P. Morgan and Mizuho Securities USA serve as joint book-running managers for the offering.
Luxco in September 2020 priced an offering of senior notes worth approximately $7.3 billion. It used those funds to repay outstanding floating rate senior notes due 2021.
The latest on Medtronic
Funding news comes on the back of an eventful couple of weeks for Medtronic. Here are a few recent reports on activity at the medtech giant:
- Earlier this month, the company offered early retirements as layoffs across the industry continue to pile up. Company officials have said there are “significant expense reductions” underway at the medtech giant
- Regulatory filings shed light on new details surrounding the company’s kidney care venture with DaVita. That includes a new name.
- In the midst of some uncertainty, the company received some good news in Europe. Its Affera ablation system for mapping and ablating atrial arrhythmias — including AFib — received CE mark.
- Medtronic updated its website to indicate a change in its business operating units. A promotion indicated the combination of its surgical robotics and surgical innovations units.
- A day after MassDevice reported this change, Medtronic confirmed the consolidation. It took effect on Feb. 1.
- The company also partnered with Nvidia to enable an AI Access platform. This move aims to boost the GI Genius intelligent endoscopy module’s capabilities.