Boston Scientific offers $1.85B in debt
Boston Scientific is offering $1.85 billion in bonds to help finance a recent acquisition and pay down previously issued debt, the Marlborough-based medical device manufacturer announced Thursday.
The public offering in what are called senior notes was open until Tuesday. The offering consists of $600 million at 2.85 percent, due May 15, 2020; $500 million at 3.375 percent, due May 15, 2022, and $750 million at 3.850 percent, due May 15, 2025. (Editor's note: Boston Scientific announced the debt offering was completed on Tuesday).
Boston Scientific (BSX) said some of the proceeds will be used to pay for its acquisition of the urology division of American Medical Systems, which BSX announced in March it would buy for $1.6 billion. That deal is expected to close in the third quarter, BSX said.
American Medical Systems (AMS) is based in Minnetonka, Minn., and is a division of Endo International, of Dublin, Ireland.
Also Thursday, Moody's Investors Service assigned a Baa3 rating to the notes, meaning they’re subject to moderate credit risk. Moody’s assesses BSX’s debt rating as stable.
Moody's said the debt tied to the AMS acquisition “reduces Boston Scientific's financial flexibility at a time when it has outstanding litigation and tax liabilities, and is likely to pursue other tuck-in acquisitions.” This, Moody’s said in its assessment, “raises the likelihood that the company will need to borrow again.”
But Moody’s added its concerns are eased by its expectation that Boston Scientific will repatriate overseas cash to reduce debt, refrain from buybacks, and see improved profit margins.
The AMS deal is BSX’s largest acquisition since it bought cardiovascular products maker Guidant Corp. in 2006 for $27.2 billion.
WBJ Web Partners
Most Recent
Most Recent
0 Comments