Medtronic prices $3B offering

Medtronic (NYSE:MDT) today priced a massive $3 billion offering, looking to reduce its debt as it continues its journey towards an A credit profile.

Charges from the offering will be recognized as a 1-time expense in its 4th fiscal quarter and will be excluded from its non-GAAP results, Fridley, Minn.-based Medtronic said.

The medtech giant added that it does not expect the transaction to affect its 4th quarter interest expense outlook or 2016 earnings per share guidance.

Earlier this month, Medtronic said it is unfazed by the U.S. Treasury Dept.’s push to rein in so-called “inversion” mergers, which allow American companies to re-organized under foreign jurisdictions, after the agency issued new rules on the deals this week.

The U.S. government has grappled with a wave of inversions in recent years, including last year’s $50 billion union of Medtronic and Covidien, which was domiciled in Ireland. Reincorporating overseas allows American companies to slash their tax bills even though their core operations and management stay here. Several U.S. presidential candidates, including Republican Donald Trump and Democrat Hillary Clinton, have seized on the issue in their campaigns. President Barack Obama, a Democrat, has called repeatedly for action by the Republican-controlled U.S. Congress on inversions, but lawmakers have done little.

The new Treasury rules impose a 3-year limit on foreign companies “bulking up” on U.S. assets to skirt ownership limits ahead of an inversion. They also tackle “earnings stripping” after inversions, a tactic designed to shrink taxable U.S. profits, and restrict related-party debt for U.S. subsidiaries that’s not used to fund new U.S. investments.

Title of Security	CUSIP Numbers	Issuer/ Offeror	Acceptance Priority Level	Reference U.S. Treasury Security	Reference Yield	Fixed Spread (basis points) (1)	Total Consideration (2)(3)	Revised Tender Cap	Principal Amount Accepted
6.550% Senior Notes due 2037	22303QAH3	CIFSA	1	3.000% U.S. Treasury Notes due 11/15/2045	2.592%	130	$1,384.77	$600,000,000	$475,961,000
2.950% Senior Notes due 2023	22303QAP5	CIFSA	2	1.625% U.S. Treasury Notes due 02/15/2026	1.785%	40	$1,048.86	$440,484,000	$440,484,000
4.000% Senior Notes due 2043	585055AY2	Medtronic, Inc.	3	3.000% U.S. Treasury Notes due 11/15/2045	2.592%	100	$1,069.29	$424,976,000	$424,976,000
2.750% Senior Notes due 2023	585055AZ9	Medtronic, Inc.	4	1.625% U.S. Treasury Notes due 02/15/2026	1.785%	25	$1,044.65	$719,779,000	$719,779,000
4.450% Senior Notes due 2020	585055AS5	Medtronic, Inc.	5	1.250% U.S. Treasury Notes due 03/31/2021	1.237%	20	$1,114.34	$484,409,000	$484,409,000
4.375% Senior Notes due 2035	585055BT2	Medtronic, Inc.	6	3.000% U.S. Treasury Notes due 11/15/2045	2.592%	90	$1,121.47	n/a	$118,381,000
2.500% Senior Notes due 2020	585055BG0	Medtronic, Inc.	7	1.250% U.S. Treasury Notes due 03/31/2021	1.237%	25	$1,038.40	$150,000,000	n/a

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