Zimmer Holdings Inc.(ZMH) sold $1 billion in new 10- and 30-year notes, with the bulk of the proceeds earmarked for retiring unsecured debt.
The deal was completed under a new shelf registration filed Nov. 12 by the Warsaw, Ind.-based orthopedics manufacturer.
According to the notes prospectus, Zimmer and its subsidiaries owed just over $600 million in long-term debt through a credit facility due Nov. 30, 2012. Zimmer is paying an annualized 1.43 percent on the loans, with the interest moving in tandem with the London Interbank Offered Rate (LIBOR).
The notes offering sold in $500 million blocs — with the 10-year senior notes carrying a 4.625-percent yield and a 5.75-percent yield on the 30-year senior notes. That worked out to a premium of 118 basis points and 135 basis points, respectively, above Thursday’s yields for 10-year and 30-year Treasuries.
Zimmer officials said they likely will spend a portion of the remaining proceeds on the company’s share repurchase plan as well as for general corporate purposes.