Business Context and Reporting Period
This Form 8-K filing by Becton, Dickinson and Company (BD) is dated June 4, 2019. The report details two primary capital market events: the issuance of new senior unsecured notes by a Luxembourg subsidiary and the results of a tender offer to repurchase existing debt securities.
Key Financial Metrics and Debt Activity
New Debt Issuance
On June 4, 2019, Becton Finance (a wholly-owned subsidiary) issued €2.0 billion in aggregate principal amount of new notes, fully and unconditionally guaranteed by BD:
- 2021 Notes: €600 million at 0.174% interest, due June 4, 2021.
- 2023 Notes: €800 million at 0.632% interest, due June 4, 2023.
- 2026 Notes: €600 million at 1.208% interest, due June 4, 2026.
Tender Offer Results
BD announced early tender results for seven series of existing notes with an aggregate tender cap of $1.1 billion. As of the Early Tender Date (June 3, 2019), the following amounts were tendered:
| Note Series | Outstanding Principal | Tendered Amount | Acceptance Status |
|---|---|---|---|
| 5.000% Notes due 2040 | $300,000,000 | $175,016,000 | Fully Accepted |
| 4.875% Notes due 2044 | $299,877,000 | $150,373,000 | Prorated (~49.92%) |
| 4.685% Notes due 2044 | $1,200,000,000 | $802,754,000 | Prorated (~21.84%) |
| 3.700% Notes due 2027 | $2,400,000,000 | $1,941,877,000 | Prorated (~34.80%) |
| 3.734% Notes due 2024 | $1,375,000,000 | $869,242,000 | Not Accepted |
| 4.669% Notes due 2047 | $1,500,000,000 | $977,019,000 | Not Accepted |
| 2.894% Notes due 2022 | $1,800,000,000 | $1,525,173,000 | Not Accepted |
Note: The filing does not provide specific revenue, profit, cash flow, or margin figures for the period.
Material Changes and Upsizing
On June 4, 2019, BD announced an upsizing of the tender offer subcaps for three specific note series to accommodate higher demand:
- 5.000% Notes: Subcap increased from $75 million to $175,016,000.
- 4.685% Notes: Subcap increased from $175 million to $175,002,000.
- 3.700% Notes: Subcap increased from $600 million to $675,000,000.
Despite the upsizing, the 4.875%, 4.685%, and 3.700% Notes remained fully subscribed, necessitating a pro-rated purchase. The 3.734%, 4.669%, and 2.894% Notes were not accepted for purchase.
Management Commentary and Terms
The new notes include standard covenants regarding events of default, change of control repurchase rights (at 101% of principal), and tax gross-up provisions. The new debt is senior unsecured and guaranteed by BD. The tender offers were conducted to refinance higher-cost debt with the newly issued lower-cost notes.
Investor Verification Checklist
- Verify the final settlement amounts for the pro-rated tender offers (4.875%, 4.685%, and 3.700% Notes) once the final proration calculations are completed.
- Confirm the net proceeds from the €2.0 billion Euro note issuance after deducting underwriting fees and expenses.
- Review the impact of the debt refinancing on the company's weighted average cost of debt and interest coverage ratios.
- Check subsequent filings for the final closing of the tender offers and the retirement of the accepted securities.