| ITEM 1.01 |
ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT |
On November 23, 2020, Stryker Corporation (the “Company”) completed a public offering (the “Offering”) of $600,000,000 aggregate principal amount of the Company’s 0.600% Notes due 2023 (the “Notes”).
The Notes were sold pursuant to an Underwriting Agreement, dated November 18, 2020 (the “Underwriting Agreement”), among the Company and Citigroup Global Markets Inc., BofA Securities, Inc. and Wells Fargo Securities, LLC, as underwriters. The Offering was made pursuant to the Company’s Automatic Shelf Registration Statement on Form S-3 (File No. 333-229539) and the Prospectus included therein, filed with the Securities and Exchange Commission on February 7, 2019, and supplemented by the Prospectus Supplement dated November 18, 2020.
The Notes were issued under an Indenture, dated January 15, 2010 (the “Base Indenture”), between the Company and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented by the Twenty-Fifth Supplemental Indenture, dated November 23, 2020, between the Company and the Trustee (the “Supplemental Indenture,” and the Base Indenture as so supplemented, the “Indenture”).
The Notes will bear interest at a rate of 0.600% per year. Interest on the Notes is payable on each June 1 and December 1, commencing on June 1, 2021. The Notes will mature on December 1, 2023.
Prior to December 1, 2021, the Company may redeem the Notes at the Company’s option for cash, any time in whole or from time to time in part, at a redemption price that includes accrued and unpaid interest and the applicable make-whole premium, as specified in the Indenture. However, no make-whole premium will be paid for redemption of the Notes on or after December 1, 2021.
The Company expects to receive net proceeds of approximately $596 million, after deducting the underwriting discount and estimated expenses related to the Offering. The Company intends to use the net proceeds from the Offering for general corporate purposes, which may include payments in connection with the redemption of Wright Medical Group N.V.’s (“Wright”) convertible debt, which the Company assumed upon completion of the acquisition of Wright.
The Company may issue additional debt from time to time pursuant to the Indenture. The Indenture contains covenants that limit the Company’s ability to, among other things, incur certain liens securing indebtedness, engage in certain sale and leaseback transactions, and enter into certain consolidations, mergers, conveyances, transfers or leases of all or substantially all of the Company’s assets. Subject to certain limitations, in the event of the occurrence of both (1) a change of control of the Company and (2) a downgrade of the Notes below investment grade rating by both Moody’s Investors’ Services, Inc. and Standard & Poor’s Ratings Services within a specified time period, the Company will be required to make an offer to purchase the Notes at a price equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest to, but not including, the date of repurchase.
The foregoing description of the Underwriting Agreement, Base Indenture and the Supplemental Indenture does not purport to be complete and is qualified in its entirety by reference to the full text of such documents, which are filed as Exhibits 1.1, 4.1 and 4.2 hereto, respectively, and incorporated herein by reference.
| ITEM 2.03 |
CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT |
The information set forth in Item 1.01 above with respect to the Notes is hereby incorporated by reference into this Item 2.03, insofar as it relates to the creation of a direct financial obligation.
