Medtronic Prices $17 Bln Of Senior Notes

(RTTNews) - Medtronic Inc. (MDT) announced the pricing of $17 billion aggregate principal amount of senior notes in seven tranches.

The notes consist of $500 million floating rate senior notes Due March 15, 2020; $1.00 billion 1.500 percent notes due March 15, 2018; $2.50 billion 2.500 percent Note due March 15, 2020; $2.50 billion 3.150 percent Notes Due March 15, 2022; $4 billion 3.500 percent Notes, Due March 15, 2025; $2.50 billion 4.375 percent Notes due March 15, 2035; $4 billion 4.625 percent Notes Due March 15, 2045.

The company stated that the floating Rate Senior Notes will bear interest at a floating rate equal to three-month LIBOR plus 0.80 percent.

The offering is expected to close on December 10, 2014, subject to customary closing conditions.

Medtronic said it intends to use the proceeds from the offering of the notes, together with borrowings under its existing term loan credit agreement, if any, to fund the cash consideration for the pending acquisition of Covidien plc by Medtronic and certain related transaction expenses.

In the event the proceeds from the offering of the notes, together with any borrowings under the term loan credit agreement, are in excess of the amount required to fund the cash consideration for the acquisition and certain transaction expenses, Medtronic said it intends to use such additional proceeds for working capital and general corporate purposes, which may include repayment of indebtedness from time to time.

As previously indicated, Medtronic and Covidien will hold shareholder meetings on January 6, 2015 to approve the acquisition. The acquisition is expected to close in early calendar year 2015.

The offering of the notes is not conditioned on the completion of the acquisition. However, if the closing of the acquisition does not occur on or prior to March 15, 2015 (as such date may be extended by Medtronic on one or more occasions to a date no later than June 15, 2015, subject to conditions), or if the agreement relating to the acquisition is terminated at any time prior thereto, Medtronic will be required to redeem all of the Floating Rate Senior Notes, the 2.500 percent Senior Notes, the 3.150 percent Senior Notes, the 3.500 percent Senior Notes and the 4.375 percent Senior Notes at 101 percent of the aggregate principal amount of such notes, plus accrued and unpaid interest up to, but not including, the redemption date.

Medtronic said in mid-June that it agreed to acquire Covidien plc (COV) in a cash and stock deal valued at about $42.9 billion. The deal will help Medtronic shift base to Ireland and save it from paying high U.S. corporate taxes.