Boston Scientific announces pricing of €1.5 billion of senior notes

Rhea-AI Summary

Boston Scientific (NYSE: BSX) announced that its wholly owned finance subsidiary, American Medical Systems Europe B.V., has priced a public offering of €1.5 billion in senior notes. The offering consists of €850 million in 3.000% notes due 2031 and €650 million in 3.250% notes due 2034.

The notes, fully guaranteed by Boston Scientific, are expected to close on February 26, 2025. The company plans to use the proceeds, along with cash on hand, to repay AMS Europe's 0.750% senior notes maturing March 8, 2025, pay accrued interest, and support general corporate purposes including short-term investments, debt reduction, working capital, and potential future acquisitions.

Positive

• Successful pricing of €1.5 billion senior notes offering indicates strong market confidence
• Strategic debt refinancing helps manage future obligations
• Flexibility in fund allocation for potential acquisitions and working capital

Negative

• Increased interest expense with new notes (3.000% and 3.250%) compared to maturing notes (0.750%)

Insights

Financial Analyst

This €1.5 billion senior notes offering represents a strategic debt restructuring that warrants careful analysis. The new notes, split between €850 million at 3.000% (2031) and €650 million at 3.250% (2034), will primarily refinance existing 0.750% notes due March 2025. The significant increase in interest rates (from 0.750% to 3.000-3.250%) reflects the broader market environment and will impact annual interest expenses by approximately €34 million.

The timing is particularly strategic, as it addresses the upcoming March 2025 maturity well in advance, demonstrating prudent liability management. The decision to issue through AMS Europe, their European subsidiary, likely capitalizes on the relatively lower interest rates in the European market compared to US rates, while also providing natural currency hedging for European operations.

The extended maturities (2031 and 2034) provide long-term financing stability, though at higher costs. The mention of potential future acquisitions in the use of proceeds suggests this offering could be partly positioning for strategic growth opportunities. Boston Scientific's strong market position ($155.5 billion market cap) and the current debt market conditions make this an opportune time to secure long-term financing, despite higher rates.

The offering's structure, using two tranches with different maturities, helps optimize the debt maturity profile and potentially appeals to different investor bases. This debt raising, while increasing interest costs, provides financial flexibility and maintains the company's strong liquidity position for operational needs and strategic initiatives.

MARLBOROUGH, Mass., Feb. 21, 2025 /PRNewswire/ -- Boston Scientific Corporation (the "Company") (NYSE: BSX) today announced that American Medical Systems Europe B.V. ("AMS Europe"), its wholly owned finance subsidiary, has priced a public offering of €850,000,000 aggregate principal amount of 3.000% notes due 2031 and €650,000,000 aggregate principal amount of 3.250% notes due 2034 (collectively, the "Notes"). The Notes will be fully and unconditionally guaranteed by the Company. The offering is being made pursuant to a registration statement filed with the U.S. Securities and Exchange Commission. 

The offering is expected to close on February 26, 2025, subject to customary closing conditions. The Company intends to use the net proceeds from the offering, together with cash on hand, to fund the repayment at maturity of AMS Europe's 0.750% senior notes due March 8, 2025 and to pay accrued and unpaid interest with respect to such notes, and for general corporate purposes, which may include, among other things, short term investments, reduction of short term debt, funding of working capital and potential future acquisitions.

Nothing herein shall constitute an offer to sell or the solicitation of an offer to buy the securities, nor shall there be any sale of the securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to qualification under the securities laws of any such state or jurisdiction. The offering is being made by means of a prospectus and related preliminary prospectus supplement only, copies of which or information concerning this offering may be obtained by contacting the joint book-running managers: Barclays Bank PLC, toll-free at 1-888-603-5847; Citigroup Global Markets Europe AG, toll-free at 1-800-831-9146; or Wells Fargo Securities Europe S.A. toll-free at 1-800-645-3751.

About Boston Scientific
Boston Scientific transforms lives through innovative medical technologies that improve the health of patients around the world. As a global medical technology leader for more than 45 years, we advance science for life by providing a broad range of high-performance solutions that address unmet patient needs and reduce the cost of health care. Our portfolio of devices and therapies helps physicians diagnose and treat complex cardiovascular, respiratory, digestive, oncological, neurological and urological diseases and conditions. Learn more at www.bostonscientific.com and connect on LinkedIn and X, formerly Twitter.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may be identified by words like "anticipate," "expect," "project," "believe," "plan," "estimate," "intend" and similar words. These forward-looking statements are based on our beliefs, assumptions and estimates using information available to us at the time and are not intended to be guarantees of future events or performance. These forward-looking statements include, among other things, statements regarding the proposed offering and intended use of proceeds. If our underlying assumptions turn out to be incorrect, or if certain risks or uncertainties materialize, actual results could vary materially from the expectations and projections expressed or implied by our forward-looking statements. These factors, in some cases, have affected and in the future (together with other factors) could affect our ability to implement our business strategy and may cause actual results to differ materially from those contemplated by the forward-looking statements expressed in this press release. As a result, readers are cautioned not to place undue reliance on any of our forward-looking statements.

Risks and uncertainties that may cause such differences include, among other things: economic conditions, including the impact of foreign currency fluctuations, future U.S. and global political, competitive, reimbursement and regulatory conditions; geopolitical events; manufacturing, distribution and supply chain disruptions and cost increases; disruptions caused by cybersecurity events; disruptions caused by public health emergencies or extreme weather or other climate change-related events; labor shortages and increases in labor costs; variations in outcomes of ongoing and future clinical trials and market studies; new product introductions and the market acceptance of those products; market competition for our products; expected pricing environment; expected procedural volumes; the closing and integration of acquisitions; demographic trends; intellectual property rights; litigation; financial market conditions; the execution and effect of our restructuring program; the execution and effect of our business strategy, including our cost-savings and growth initiatives; our ability to achieve environmental, social and governance goals; and future business decisions made by us and our competitors. New risks and uncertainties may arise from time to time and are difficult to predict. All of these factors are difficult or impossible to predict accurately and many of them are beyond our control. For a further list and description of these and other important risks and uncertainties that may affect our future operations, see Part I, Item 1A – Risk Factors in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, which we may update in Part II, Item 1A – Risk Factors in Quarterly Reports on Form 10-Q we will file hereafter. We disclaim any intention or obligation to publicly update or revise any forward-looking statements to reflect any change in our expectations or in events, conditions or circumstances on which those expectations may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements, except as required by law. This cautionary statement is applicable to all forward-looking statements contained in this press release.

CONTACTS:
Chanel Hastings
Media Relations
+1 (508) 382-0288
Chanel.Hastings@bsci.com

Jon Monson
Investor Relations
+1 (508) 683-5450
BSXInvestorRelations@bsci.com

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SOURCE Boston Scientific Corporation

FAQ

What is the total value of Boston Scientific's (BSX) new senior notes offering?

Boston Scientific's new senior notes offering totals €1.5 billion, consisting of €850 million in 3.000% notes due 2031 and €650 million in 3.250% notes due 2034.

When will Boston Scientific's (BSX) new senior notes offering close?

The senior notes offering is expected to close on February 26, 2025, subject to customary closing conditions.

What will Boston Scientific (BSX) use the proceeds from the senior notes for?

The proceeds will be used to repay maturing 0.750% senior notes due March 8, 2025, pay accrued interest, and support general corporate purposes including investments, debt reduction, working capital, and potential acquisitions.

What are the interest rates on BSX's new senior notes?

The new senior notes have interest rates of 3.000% for notes due 2031 and 3.250% for notes due 2034.

Which subsidiary of Boston Scientific (BSX) is issuing the senior notes?

American Medical Systems Europe B.V. (AMS Europe), a wholly owned finance subsidiary of Boston Scientific, is issuing the senior notes.