Sonic Healthcare to raise €400 million in long term debt
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The news: Pathology services provider Sonic Healthcare is raising debt funding in the US private placement market to refinance existing debt.
The numbers: Sonic said it has priced €400 million ($660 million) via a notes issue. Of this, notes worth €100 million will have a seven year maturity, €200 million will have a 10-year maturity, while another €100 million will have a 15-year tenor. The weighted average fixed coupon rate for the notes is 4.1%. The transaction is expected to close later this month.
Sonic shares were down 0.5% to $27.52 in early trading.
The context: The company said the proceeds will be initially used to repay bank debt, and to effectively refinance €185 million worth of existing notes that are due to mature in November.
The longer tenure of the new notes will significantly lengthen Sonic’s debt maturity profile and increase available liquidity. Chief financial officer Chris Wilks said the latest transaction was strongly supported by both existing and new investors.
Earlier this year, Sonic flagged lower earnings for FY24 and a slight improvement in FY25 on the back of inflation and foreign exchange headwinds.
The source: ASX announcement
