Royal Philips announced on 28 april the successful pricing of its issue of EUR 750 million fixed rate notes due 2027 (“2027 Notes”), EUR 650 million Green Innovation Notes due 2029 and EUR 600 million Sustainability Innovation Notes due 2033 (together, the “Notes”) under its European Medium Term Note (EMTN) program (the “EMTN Offering”).
The net proceeds of the Notes will be used for Eligible Projects in accordance with Philips Green and Sustainability Innovation Bond Framework and, in the case of the 2027 Notes, for general corporate purposes. Pending the full allocation of the net proceeds of the Notes, Philips intends to optimize its short-term treasury liquidity profile by applying such net proceeds towards the following liability management transactions all of which are subject to the successful completion of the EMTN Offering:
- A tender offer for certain series of its outstanding U.S. Dollar-denominated bonds due 2025 and 2026;
- A tender offer for certain series of its outstanding Euro-denominated notes due 2023, 2024 and 2025 (the “Euro Tender Offer”);
- The proposed make-whole redemption of any of the Euro-denominated notes due 2023 and 2024 that are not purchased in the Euro Tender Offer (the “Euro Make-Whole Redemption”); and
- The proposed agreement with the relevant counterparties for early settlement of the outstanding forward contracts entered into in the third quarter of 2021 under the share buyback program for capital reduction purposes announced on July 26, 2021 (the “Early Forward Settlement”). The acquisition of 19,571,218 shares through the settlement of these forward contracts would result in the early completion of the repurchase program. Philips would then expect to cancel a total of approximately 28.3 million shares (including shares acquired through open market purchases in December 2021 and January 2022 under the aforementioned share buyback program) in the course of 2022, representing 3.3% of Philips’ currently outstanding shares.