Medtronic raised $17 billion in a bond sale completed yesterday, making it the largest corporate-debt sale in 2014, according to a Wall Street Journal report.
The company is raising money to finance their $43 billion acquisition of Ireland-based Covidien, where Medtronic hopes to relocate headquarters in a tax inversion strategy that is currently under scrutiny by United States legislators. Medtronic hopes the deal will come through quickly — in the beginning of 2015 — and it just might; the FTC and European Union regulatory bodies gave the companies approval to merge last week.
Here are 10 things to know about Medtronic's bond sale:
1. The company's issuance this year in total is $1.5 trillion, including all debt sales of all ratings in the United States.
2. Medtronic is taking advantage of low interest rates by selling the bonds now.
3. Earlier estimates put Medtronic's bond sale at around $10 billion. The bigger size of the deal shows "investors are scrambling to snap up relatively safe debt that offers higher yields than Treasurys and other developed-country government bonds," according to the WSJ.
4. Medtronic bond yields were lowered all day long on Monday, suggesting strong investor demand.
5. Bonds of maturities were sold between three years and 30 years.
6. The sale attracted $45 billion in orders.
7. There were several reasons investors sought out Medtronic bonds, including because "debt offered greater yield than the company's outstanding bonds," according to the WSJ.
8. Bank of America Merrill Lynch, Deutsche Bank AG and J.P. Morgan Chase & Co., led the bond sale.
9. Moody's Investor Service gave the bonds an A3 provisional rating. This is below the previous rating.
10. After this sale, Medtronic is tied with Apple for the second largest sale of all time.