Zimmer Biomet settles early tenders, will not accept any more notes

By Marisa Wong

Morgantown, W.Va., Dec. 13 – Zimmer Biomet Holdings, Inc. announced it accepted for purchase $182,227,000 of 5.75% senior notes due 2039, $854,576,000 of 4.45% senior notes due 2045 and $246,583,000 of 4.25% senior notes due 2035 tendered as of 5 p.m. ET on Dec. 5, the early tender date of its tender offer for five series of notes.

The accepted notes were purchased on Tuesday, according to a press release.

As announced Dec. 5, Zimmer increased the tender cap to $1.25 billion from $1.1 billion.

As of the early tender date, investors had tendered the following amounts of notes, listed in order of priority acceptance level:

• $182,227,000 of the $500 million 5.75% senior notes due 2039 with a tender sub-cap of $250 million and pricing based on the 2.25% U.S. Treasury notes due Aug. 15, 2046 plus 170 basis points. The reference yield was 3.093%, and the total purchase price was $1,132.36 per $1,000 principal amount;

• $854,576,000 of the $1.25 billion 4.45% senior notes due 2045 with pricing based on the 2.25% U.S. Treasury notes due Aug. 15, 2046 plus 170 bps. The reference yield was 3.093%, and total purchase price was $946.78 per $1,000 principal amount;

• $319,295,000 of the $500 million 4.25% senior notes due 2035 with pricing based on the 2.25% U.S. Treasury notes due Aug. 15, 2046 plus 155 bps. The reference yield was 3.093%, and total purchase price was $951.23 per $1,000 principal amount;

• $1,060,858,000 of the $2 billion 3.55% senior notes due 2025 with a tender sub-cap of $200 million and pricing based on the 2% U.S. Treasury notes due Nov. 15, 2026 plus 130 bps. The reference yield was 2.391%, and the total purchase price was $989.96 per $1,000 principal amount; and

• $171,447,000 of the $500 million 4.625% senior notes due 2019 with a tender sub-cap of $200 million and pricing based on the 1% U.S. Treasury notes due Nov. 15, 2019 plus 65 bps. The reference yield was 1.397%, and the total purchase price was $1,073.76 per $1,000 principal amount.

Pricing was set at 11 a.m. ET on Dec. 6. The total purchase price included a $30.00 per $1,000 principal amount early premium for notes tendered by the early tender date. The company also paid accrued interest to the early settlement date.

The tender offers are scheduled to expire at 11:59 p.m. ET on Dec. 19. But because the offers were oversubscribed as of the early deadline, the company has not accepted and will not accept for purchase any tenders after the early deadline.

Zimmer made the offers to reduce the principal amount of its outstanding debt, according to a previous company announcement.

The offers include a financing condition, which has been satisfied, according to Tuesday’s press release. Zimmer issued €500 million of 1.414% notes due 2022 and €500 million of 2.425% notes due 2026. Proceeds from the euro notes were used to fund the tender offer.

J.P. Morgan Securities LLC (212 834-3424 or 866 834-4666) and Wells Fargo Securities, LLC (704 410-4760 or 866 309-6316) are the dealer managers. D.F. King & Co, Inc. (888 564-8149, 212 269-5550 or zbh@dfking.com) is the information agent.

Zimmer Biomet, based in Warsaw, Ind., designs, manufactures and markets orthopedic reconstructive and other products.

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