- GE HealthCare has priced an offering of $8.25 billion senior notes in conjunction with the spinoff from its parent company.
- The new company plans to distribute the net proceeds from part of the offering, known as the “New Money Notes,” to GE prior to the completion of the spinoff early next year.
- GE HealthCare’s pricing of the bonds is part of a push to prepare for life as a spinoff, which has also seen it form a separation and distribution agreement with its parent company and secure access to credit.
Spinning off GE HealthCare entails untangling a unit that generated sales of $17.7 billion last year from a broader business that pulled in $74.1 billion, including the healthcare revenues. With the separation set to happen in under two months, GE HealthCare is stepping up its preparations to operate as an independent company.
This week, the healthcare business priced a set of senior notes, bonds that take precedence over other debts in the event of bankruptcy, worth $8.25 billion. The senior notes are due on dates ranging from 2024 to 2052. Most of the senior notes are due over the coming decade, with the $1 billion due in 2052 the only bonds beyond that period.
GE released news of the pricing of the senior notes shortly after posting a financial regulatory filing on the progress of other aspects of the planned spinoff. The filing reveals the formation of a separation and distribution agreement between GE HealthCare and its parent company, the terms of which are the same as those presented in a recent registration statement.
The filing also discloses multiple credit facilities. GE HealthCare has secured access to up to $5.5 billion across three credit facilities in connection with the spinoff.