Published on 3/13/2020 in the Prospect News Investment Grade Daily.
New Issue: Zimmer Biomet Holdings prices $1.5 billion of notes in two tranches
By Cristal Cody
Tupelo, Miss., March 13 – Zimmer Biomet Holdings, Inc. priced a $1.5 billion two-tranche offering of senior notes (Baa3/BBB) on Friday, according to a market source and an FWP filing with the Securities and Exchange Commission.
The company sold $600 million of 3.05% notes due Jan. 15, 2026 at 99.881 to yield 3.073%.
The notes priced at a spread of Treasuries plus 237.5 basis points, tighter than initial talk in the Treasuries plus 250 bps area.
A $900 million tranche of 3.55% notes due March 20, 2030 priced at 99.758 to yield 3.579%. The notes priced on top of guidance at a Treasuries plus 262.5 bps spread.
BofA Securities, Inc., Citigroup Global Markets Inc., RBC Capital Markets, LLC, Wells Fargo Securities LLC, HSBC Securities (USA) Inc. and Mizuho Securities USA LLC were the bookrunners.
Proceeds will be used with borrowings under the company’s senior unsecured credit facility and cash on hand to repay at maturity Zimmer’s $1.5 billion of 2.7% notes due April 1, 2020.
Zimmer Biomet, based in Warsaw, Ind., designs, manufactures and markets orthopedic reconstructive and other products.
| Issuer: | Zimmer Biomet Holdings, Inc.
|
| Amount: | $1.5 billion
|
| Description: | Senior notes
|
| Bookrunners: | BofA Securities, Inc., Citigroup Global Markets Inc., RBC Capital Markets, LLC, Wells Fargo Securities LLC, HSBC Securities (USA) Inc. and Mizuho Securities USA LLC
|
| Senior co-managers: | J.P. Morgan Securities LLC, MUFG, SMBC Nikko Securities America, Inc., BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC and DNB Markets, Inc.
|
| Co-managers: | Goldman Sachs & Co. LLC, U.S. Bancorp Investments, Inc., BMO Capital Markets Corp., TD Securities (USA) LLC, DZ Financial Markets LLC, UniCredit Capital Markets LLC, Loop Capital Markets LLC, PNC Capital Markets LLC and Siebert Williams Shank & Co., LLC
|
| Trade date: | March 13
|
| Settlement date: | March 20
|
| Ratings: | Moody’s: Baa3
|
| S&P: BBB
|
| Distribution: | SEC registered
|
|
|
| Six-year notes
|
| Amount: | $600 million
|
| Maturity: | Jan. 15, 2026
|
| Coupon: | 3.05%
|
| Price: | 99.881
|
| Yield: | 3.073%
|
| Spread: | Treasuries plus 237.5 bps
|
| Call features: | Make-whole call before Dec. 15, 2025 at price equal to greater of par and Treasuries plus 40 bps; thereafter at par
|
| Change-of-control put: | 101%
|
| Price guidance: | Treasuries plus 250 bps area
|
|
|
| 10-year notes
|
| Amount: | $900 million
|
| Maturity: | March 20, 2030
|
| Coupon: | 3.55%
|
| Price: | 99.758
|
| Yield: | 3.579%
|
| Spread: | Treasuries plus 262.5 bps
|
| Call features: | Make-whole call before Dec. 20, 2029 at price equal to greater of par and Treasuries plus 40 bps; thereafter at par
|
| Change-of-control put: | 101%
|
| Price guidance: | Treasuries plus 262.5 bps area
|
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