McKesson Prices $6.25B in Senior Notes

TL;DR

MCK just dropped $6.25B in new debt across 3 tranches. Debt management play.

AI Summary

On September 5, 2024, McKesson Corporation (MCK) announced the pricing of its senior unsecured notes. The company priced $1.500 billion of notes due 2025, $1.625 billion of notes due 2026, and $3.125 billion of notes due 2029. These offerings are part of McKesson's ongoing efforts to manage its capital structure.

Why It Matters

McKesson's issuance of a significant amount of debt indicates a strategic move to fund operations or acquisitions, potentially impacting its leverage and future financial flexibility.

Risk Assessment

Risk Level: medium — Issuing a large amount of debt increases financial leverage and interest expense, which could pose risks if the company's earnings decline.

Key Numbers

• $6.25B — Total Debt Issued (Aggregate principal amount of senior unsecured notes priced across three tranches.)
• $1.500B — Notes Due 2025 (Principal amount of the shortest-term notes issued.)
• $1.625B — Notes Due 2026 (Principal amount of the medium-term notes issued.)
• $3.125B — Notes Due 2029 (Principal amount of the longest-term notes issued.)

Key Players & Entities

• McKesson Corporation (company) — Registrant
• MCK (company) — Ticker Symbol
• $1.500 billion (dollar_amount) — Principal amount of notes due 2025
• $1.625 billion (dollar_amount) — Principal amount of notes due 2026
• $3.125 billion (dollar_amount) — Principal amount of notes due 2029
• September 5, 2024 (date) — Date of pricing

FAQ

Key Financial Figures

• $0.01 — ange on which registered Common stock, $0.01 par value MCK New York Stock Exchange
• $500,000,000 — ch the Company agreed to issue and sell $500,000,000 aggregate principal amount of its 4.250
• $498.0 million — unt. The Company received approximately $498.0 million in net proceeds from the offering of th

Filing Documents

• mck-20240905.htm (8-K) — 44KB
• exhibit41-8xk.htm (EX-4.1) — 156KB
• exhibit51-8xk.htm (EX-5.1) — 19KB
• exhibit991-8xk.htm (EX-99.1) — 220KB
• mck-20240905_g1.jpg (GRAPHIC) — 3KB
• screenshot2024-09x06120706a.jpg (GRAPHIC) — 15KB
• 0000927653-24-000110.txt ( ) — 729KB
• mck-20240905.xsd (EX-101.SCH) — 3KB
• mck-20240905_def.xml (EX-101.DEF) — 16KB
• mck-20240905_lab.xml (EX-101.LAB) — 29KB
• mck-20240905_pre.xml (EX-101.PRE) — 17KB
• mck-20240905_htm.xml (XML) — 5KB

01 Other Events

Item 8.01 Other Events. Closing of Notes Offering On September 5, 2024, McKesson Corporation (the "Company") entered into an Underwriting Agreement (the "Underwriting Agreement") with the several underwriters named therein (the "Underwriters"), pursuant to which the Company agreed to issue and sell $500,000,000 aggregate principal amount of its 4.250% Notes due 2029 (the "Notes"). On September 10, 2024, the Notes were issued pursuant to the Indenture, dated February 15, 2023 (the "Indenture"), between the Company and U.S. Bank Trust Company, National Association, as trustee (the "Trustee"), as amended and supplemented by an Officer's Certificate, dated September 10, 2024, setting forth certain terms of the Notes (the "Officer's Certificate"). The Notes will bear interest at the rate of 4.250% per year. Interest on the Notes is payable on September 15 and March 15 of each year, beginning on March 15, 2025. Upon at least 10 days' and not more than 60 days' notice to holders of the Notes, the Company may redeem the Notes for cash in whole, at any time, or in part, from time to time, (x) prior to August 15, 2029, at a redemption price that includes accrued and unpaid interest and a make-whole premium that is calculated based on the Treasury Rate (as defined in the Officer's Certificate) plus 15 basis points and (y) on or after August 15, 2029, at par plus accrued and unpaid interest, in each case, as specified in the Indenture and the Officer's Certificate. The Indenture and the Officer's Certificate include certain covenants, including limitations on the Company's ability to create certain liens on its assets or enter into sale and leaseback transactions with respect to its properties, or consolidate, merge or sell all or substantially all of its assets, subject to a number of important exceptions as specified in the Indenture. The Notes are unsecured and unsubordinated obligations of the Company and rank equally with all of the Company's existing and future unsecu

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits. Exhibit No. Description of Exhibits 4.1 Officer's Certificate, dated as of September 10, 2024, with respect to the Notes. 4.2 Form of Note (included in Exhibit 4.1 above). 5.1 Opinion of Morrison & Foerster LLP regarding the validity of the Notes. 23.1 Consent of Morrison & Foerster LLP (included in Exhibit 5.1 above). 99.1 Underwriting Agreement, dated as of September 5, 2024, by and among McKesson Corporation and the several underwriters named therein. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document). SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: September 10, 2024 McKesson Corporation By: /s/ Britt J. Vitalone Britt J. Vitalone Executive Vice President and Chief Financial Officer

View Full Filing

View this 8-K filing on SEC EDGAR