Philips successfully prices offering of Notes for EUR 700 million to be used for repayment of existing debt
Royal Philips has successfully priced its offering of EUR 700 million fixed rate notes, set to mature in 2032, under its European Medium Term Note (EMTN) program.
The notes were priced at 98.257% with a 3.75% coupon, resulting in a yield of 4.009%.
The issue, which was over two times oversubscribed, aims to be debt-neutral as it will be used to repay existing debt due in 2024 and 2025.
Philips holds a BBB+ rating from Standard & Poor's and Fitch, and a Baa1 rating from Moody's.
The settlement and issue of the notes are scheduled for May 31, 2024, and the notes will be listed on the Luxembourg Stock Exchange.
This offering is not registered under the U.S. Securities Act and is not intended for retail investors in the EEA or UK.
- Successful pricing of EUR 700 million notes.
- Over two times oversubscribed offering.
- 3.75% coupon with a yield of 4.009%.
- Debt-neutral effect as proceeds will repay existing debt.
- BBB+ rating by Standard & Poor's and Fitch.
- Baa1 rating by Moody's.
- Listing on the Luxembourg Stock Exchange.
- Notes offering is not registered under the U.S. Securities Act.
- Not intended for retail investors in the EEA or UK.
- Only available to professional clients and eligible counterparties.
Philips' recent pricing of EUR
Philips' commitment to maintaining a strong investment-grade credit rating is noteworthy. Current ratings of BBB+ by Standard & Poor's, Baa1 by Moody's and BBB+ by Fitch suggest economic stability but also highlight a cautious approach to borrowing. This conservative financial strategy can be favorable for long-term investors as it minimizes risk while still providing adequate returns.
Retail investors may find this news reassuring as it shows Philips' proactive steps in debt management and maintaining financial health. However, it's also important to weigh other factors such as the company's overall profitability and growth prospects.
This bond issuance under Philips’ European Medium Term Note (EMTN) program has broader implications for the financial market and investor sentiment. The fact that the offering was more than 2 times oversubscribed signals a strong market appetite for corporate debt, potentially reflecting positive sentiment towards the health technology sector. For retail investors, this is an indication that institutional investors have confidence in Philips' future performance, which can be a positive signal for Philips' stock price stability.
Moreover, the listing on the Luxembourg Stock Exchange provides additional liquidity and credibility, which can enhance investor confidence. Retail investors should, however, remain mindful of the economic environment and how changes in interest rates might affect the yield on these notes.
From a credit perspective, the issuance of these notes and their subsequent debt-neutral impact is a prudent move by Philips. Maintaining a strong investment-grade rating—currently BBB+ and Baa1—helps keep borrowing costs manageable and reflects solid financial stewardship. The decision to issue notes maturing in 2032 also demonstrates a long-term approach to liability management, reducing the risk of refinancing in unfavorable market conditions.
Retail investors should consider the impact of these actions on Philips' balance sheet. Effective debt management ensures that the company remains financially flexible, which is important for navigating potential economic uncertainties and sustaining growth. This news is a positive indicator of Philips' credit health, which could translate to stability in its equity performance over time.
May 23, 2024
Amsterdam, the Netherlands – Royal Philips (NYSE: PHG, AEX: PHIA), a global leader in health technology, today announced the successful pricing of its offering of EUR 700 million fixed rate notes due 2032 (the “Notes”) under its European Medium Term Note (EMTN) program.
The issue of the Notes will have a debt-neutral effect, as the net proceeds of the transaction will be used for repayment of debt in 2024 and 2025.
The issue price for the Notes is
Settlement and issue of the Notes is scheduled for May 31, 2024. Application has been made for the Notes to be listed on the Official List of the Luxembourg Stock Exchange and to be traded on the regulated market of the Luxembourg Stock Exchange.
Philips is committed to maintaining a strong investment grade credit rating. Currently, the company has a BBB+ rating by Standard & Poor's, a Baa1 rating by Moody's and a BBB+ rating by Fitch.
THIS PRESS RELEASE IS NOT AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES. THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ‘SECURITIES ACT‘), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN APPLICABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT. THERE IS NO INTENTION TO REGISTER ANY SECURITIES REFERRED TO HEREIN IN THE UNITED STATES OR TO CONDUCT A PUBLIC OFFERING OF SECURITIES IN THE UNITED STATES.
PROHIBITION OF SALES TO EEA RETAIL INVESTORS – The Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area (the “EEA”). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, “MiFID II”); or (ii) a customer within the meaning of Directive (EU) 2016/97, where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II. Consequently no key information document required by Regulation (EU) No 1286/2014 (as amended, the “PRIIPs Regulation”) for offering or selling the Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.
PROHIBITION OF SALES TO UK RETAIL INVESTORS – The Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the United Kingdom (the “UK”). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (the “EUWA”); or (ii) a customer within the meaning of the provisions of the FSMA and any rules or regulations made under the Financial Services and Markets Act 2000 (as amended, the “FSMA”) to implement Directive (EU) 2016/97, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA. Consequently no key information document required by Regulation (EU) No 1286/2014 as it forms part of domestic law by virtue of the EUWA (the “UK PRIIPs Regulation”) for offering or selling the Notes or otherwise making them available to retail investors in the UK has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the UK may be unlawful under the UK PRIIPs Regulation.
In the UK, this press release is being distributed to, and is directed at, only (a) persons who have professional experience in matters relating to investments who fall within the definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”); or (b) high net worth companies, and other persons to whom it may otherwise lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). The Notes are available only to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such Notes will be available only to or will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this press release or any of its contents.
Relevant stabilisation regulations including FCA/ICMA apply.
MiFID II and UK MiFIR professionals/ECPs-only
Manufacturer target market (MIFID II and UK MiFIR product governance) is eligible counterparties and professional clients only (all distribution channels).
For further information, please contact:
Ben Zwirs
Philips External Relations
Tel.: +31 6 1521 3446
E-mail: ben.zwirs@philips.com
Dorin Danu
Philips Investor Relations
Tel.: +31 20 59 77055
E-mail: dorin.danu@philips.com
About Royal Philips
Royal Philips (NYSE: PHG, AEX: PHIA) is a leading health technology company focused on improving people's health and well-being through meaningful innovation. Philips’ patient- and people-centric innovation leverages advanced technology and deep clinical and consumer insights to deliver personal health solutions for consumers and professional health solutions for healthcare providers and their patients in the hospital and the home. Headquartered in the Netherlands, the company is a leader in diagnostic imaging, ultrasound, image-guided therapy, monitoring, and enterprise informatics, as well as in personal health. Philips generated 2023 sales of EUR 18.2 billion and employs approximately 69,100 employees with sales and services in more than 100 countries. News about Philips can be found at www.philips.com/newscenter.
Forward-looking statements
This release contains certain forward-looking statements with respect to the financial condition, results of operations and business of Philips and certain of the plans and objectives of Philips with respect to these items. Examples of forward-looking statements include statements made about the strategy, estimates of sales growth, future EBITA, future developments in Philips’ organic business and the completion of acquisitions and divestments. By their nature, these statements involve risk and uncertainty because they relate to future events and circumstances and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these statements.
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