Published on 3/11/2015 in the Prospect News Investment Grade Daily.
New Issue: Zimmer details $7.65 billion seven-part sale of senior notes
By Aleesia Forni
Virginia Beach, March 11 – Zimmer Holdings Inc. gave details of its $7.65 billion seven-part sale of senior notes (Baa3/BBB) in a FWP filed with the Securities and Exchange Commission.
The offering included $500 million of 1.45% two-year notes priced at 99.94 to yield 1.48%, or Treasuries plus 80 basis points.
A $1.15 billion tranche of 2% three-year notes priced at 99.932 to yield 2.023%, or 95 bps over Treasuries.
A $1.5 billion tranche of 2.7% five-year notes sold at 99.948 to yield 2.711%, or 110 bps over Treasuries.
There was also $750 million of 3.15% seven-year notes priced at 99.748 to yield 3.19% with a spread of Treasuries plus 125 bps.
A $2 billion tranche of 3.55% 10-year notes sold at 99.765 to yield 3.578%, or 145 bps over Treasuries.
The company also priced $500 million of 4.25% 20-year notes at 99.342 to yield 4.299%, or Treasuries plus 160 bps.
Finally, $1.25 billion of 4.45% 30-year bonds sold at 99.196 to yield 4.499%, or 180 bps over Treasuries.
BofA Merrill Lynch, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC were the bookrunners.
Proceeds will be used to finance Zimmer’s acquisition of Biomet, Inc.
Zimmer, based in Warsaw, Ind., develops and markets reconstructive and spinal implants and trauma and related orthopedic surgical products.
| Issuer: | Zimmer Holdings Inc.
|
| Issue: | Senior notes
|
| Amount: | $7.65 billion
|
| Bookrunners: | BofA Merrill Lynch, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC
|
| Co-managers: | BNP Paribas Securities Corp., MUFG, Goldman, Sachs & Co., HSBC Securities (USA) Inc., RBC Capital Markets, LLC, RBS Securities Inc., Mizuho Securities USA Inc., SMBC Nikko Securities America, Inc., U.S. Bancorp Investments, Inc., Wells Fargo Securities, LLC, BMO Capital Markets Corp., DNB Markets, Inc., Banca IMI SpA, PNC Capital Markets LLC, Santander Investment Securities Inc., Loop Capital Markets LLC, UniCredit Capital Markets LLC
|
| Trade date: | March 10
|
| Settlement date: | March 19
|
| Change-of-control: | 101%
|
| Ratings: | Moody’s: Baa3
|
| Standard & Poor’s: BBB
|
| Distribution: | SEC registered
|
|
|
| Two-year notes
|
| Amount: | $500 million
|
| Maturity: | April 1, 2017
|
| Coupon: | 1.45%
|
| Price: | 99.94
|
| Yield: | 1.48%
|
| Spread: | 80 bps over Treasuries
|
| Price talk: | 85 bps area over Treasuries, tightened from 95 bps area
|
| Make-whole call: 12.5 bps
|
|
|
| Three-year notes
|
| Amount: | $1.15 billion
|
| Maturity: | April 1, 2018
|
| Coupon: | 2%
|
| Price: | 99.932
|
| Yield: | 2.023%
|
| Spread: | 95 bps over Treasuries
|
| Price talk: | 100 bps area over Treasuries, tightened from 105 bps area
|
| Make-whole call: 15 bps
|
|
|
| Five-year notes
|
| Amount: | $1.5 billion
|
| Maturity: | April 1, 2020
|
| Coupon: | 2.7%
|
| Price: | 99.948
|
| Yield: | 2.711%
|
| Spread: | 110 bps over Treasuries
|
| Price talk: | 115 bps area over Treasuries, tightened from 120 bps area
|
| Make-whole call: 20 bps prior to March 1, 2020, then callable at par
|
|
|
| Seven-year notes
|
| Amount: | $750 million
|
| Maturity: | April 1, 2022
|
| Coupon: | 3.15%
|
| Price: | 99.749
|
| Yield: | 3.19%
|
| Spread: | 125 bps over Treasuries
|
| Price talk: | 130 bps area over Treasuries, tightened from 135 bps area
|
| Make-whole call: 20 bps prior to Feb. 1, 2022, then callable at par
|
|
|
| 10-year notes
|
| Amount: | $2 billion
|
| Maturity: | April 1, 2025
|
| Coupon: | 3.55%
|
| Price: | 99.765
|
| Yield: | 3.578%
|
| Spread: | 145 bps over Treasuries
|
| Price talk: | 150 bps area over Treasuries, tightened from 155 bps area
|
| Make-whole call: 25 bps prior to Jan. 1, 2025, then callable at par
|
|
|
| 20-year notes
|
| Amount: | $500 million
|
| Maturity: | Aug. 15, 2035
|
| Coupon: | 4.25%
|
| Price: | 99.342
|
| Yield: | 4.299%
|
| Spread: | 160 bps over Treasuries
|
| Price talk: | 165 bps area over Treasuries, tightened from 170 bps area
|
| Make-whole call: 25 bps prior to Feb. 15, 2035, then callable at par
|
|
|
| 30-year bonds
|
| Amount: | $1.25 billion
|
| Maturity: | Aug. 15, 2045
|
| Coupon: | 4.45%
|
| Price: | 99.196
|
| Yield: | 4.499%
|
| Spread: | 180 bps over Treasuries
|
| Price talk: | 185 bps area over Treasuries, tightened from 190 bps area
|
| Make-whole call: 30 bps prior to Feb. 15, 2045, then callable at par
|
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