Medtronic Inc. (NYSE:MDT) registered with the Securities & Exchange Commission for a $3 billion offering of senior debt notes in a bid to raise funds to cover its working capital needs and, perhaps, to pay down some of its debt.
The Fridley, Minn.-based medical device monolith announced the offering of $1.25 billion worth of its 3 percent senior notes, due in 2015; $1.25 billion of its 4.45 percent senior notes due in 2020; and $500 million of its 5.55 percent senior notes due in 2040.
"Medtronic intends to use the net proceeds for working capital and general corporate purposes, which may include the repayment of its indebtedness," according to a press release. The notes are rated A1/AA by Moody’s Investors Service and Standard & Poor’s, according to a regulatory filing. Senior debt takes priority over other unsecured debt, meaning that, in the event of bankruptcy, it must be repaid first.
In February, Medtronic posted sales of $3.85 billion during the three months ended Jan. 29, up 10.2 percent compared with $3.49 billion during Q3 2009. Net income rose 19.1 percent to $831 million (or 75 cents per share), compared with $698 million (62 cents per share) during the same period in fiscal 2009.
But the worm turned in March, as news broke of a federal false claims probe in Massachusetts and Food & Drug Administration concerns over the efficacy of Medtronic’s Activa deep-brain stimulation device in treating epilepsy.