By Mary-Katherine Stinson and Cristal Cody
Lexington, Ky., March 14 – Smith & Nephew plc priced two tranches of dollar-denominated fixed-rate notes (Baa2/BBB+) totaling $1 billion on Wednesday, according to an FWP filed with the Securities and Exchange Commission and details from a market source.
A $350 million tranche of 5.15% notes due 2027 priced at 99.893 to yield 5.189%, or 80 basis points above Treasuries. Price talk was in the Treasuries plus 110 bps area.
Additionally, the company sold $650 million of 5.4% notes due 2034 at 99.695 to yield 5.44%, or Treasuries plus 125 bps. Talk had this tranche coming in the Treasuries plus 155 bps area.
The 2027 notes feature a make-whole call at Treasuries plus 15 bps before Feb. 20, 2027, followed by a par call for the last month.
The 2034 notes have a make-whole call at Treasuries plus 20 bps before Dec. 20, 2033 before transitioning to a par call for the final three months.
There is a par call for taxation reasons and a change-of-control put at 101.
HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, Mizuho Securities USA LLC and SG Americas Securities, LLC are the joint bookrunning managers.
Bank of China Ltd. London Branch, BNP Paribas Securities Corp., BofA Securities, Inc. and SMBC Nikko Securities America Inc. are also bookrunners.
A portion of the proceeds totaling $800 million will be used to repay the amount outstanding under the company’s revolving credit facility with the remainder being used to redeem at maturity the 3.36% private placement notes due 2024 and otherwise for general corporate purposes. The revolver is scheduled to mature in October 2028, with options to extend to 2030.
Smith & Nephew is a London-based medical technology company.
| Issuer: | Smith & Nephew plc
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| Amount: | $1 billion
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| Issue: | Senior notes
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| Bookrunners: | HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, Mizuho Securities USA LLC, SG Americas Securities, LLC, Bank of China Ltd. London Branch, BNP Paribas Securities Corp., BofA Securities, Inc. and SMBC Nikko Securities America Inc.
|
| Co-managers: | R. Seelaus & Co. LLC and Seibert Williams Shank & Co., LLC
|
| Trustee: | Bank of New York Mellon, London Branch
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| Counsel to issuer: | Davis Polk & Wardwell London LLP
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| Counsel to underwriters: | Sidley Austin LLP
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| Change of control: | At 101
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| Trade date: | March 13
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| Settlement date: | March 20
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| Ratings: | Moody’s: Baa2
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| S&P: BBB+
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| 2027 notes
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| Amount: | $350 million
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| Maturity: | March 20, 2027
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| Coupon: | 5.15%
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| Price: | 99.893
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| Yield: | 5.189%
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| Spread: | Treasuries plus 80 bps
|
| Call features: | At Treasuries plus 15 bps before Feb. 20, 2027; after at par
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| Price talk: | Treasuries plus 110 bps area
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| Cusip: | 83192PAC2
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|
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| 2034 notes
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| Amount: | $650 million
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| Maturity: | March 20, 2034
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| Coupon: | 5.4%
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| Price: | 99.695
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| Yield: | 5.44%
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| Spread: | Treasuries plus 125 bps
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| Call features: | At Treasuries plus 20 bps before Dec. 20, 2033; after at par
|
| Price talk: | Treasuries plus 155 bps area
|
| Cusip: | 83192PAD0
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