BSX Boston Scientific Corporation

Issuer:

Boston Scientific Corporation, a Delaware corporation

Pricing Date:

May 21, 2020

Trade Date:

May 22, 2020

Settlement Date:

May 27, 2020 (T+2)

Common Stock Offering

Title of Securities:

Common stock, par value $0.01 per share, of the Issuer (“Common Stock”)

Number of Shares of Common Stock Offered:

25,550,000 shares (or 29,382,500 shares if the underwriters of the Common Stock Offering exercise in full their option to purchase additional shares of Common Stock)

Common Stock Outstanding after Common Stock Offering:

1,672,427,242 shares (or 1,676,259,742 shares if the underwriters of the Common Stock Offering exercise in full their option to purchase additional shares of common stock), based on shares outstanding as of March 31, 2020

Symbol/Exchange:

BSX/The New York Stock Exchange (“NYSE”)

Last Reported Sale Price of Common Stock on the NYSE on the Pricing Date:

$34.79 per share of Common Stock

Public Offering Price:

$34.25 per share of Common Stock

Underwriting Discount:





Net Proceeds:

$1.0275 per share of Common Stock

$26,252,625 in aggregate (or $30,190,518.75 in aggregate if the underwriters of the Common Stock Offering exercise in full their option to purchase additional shares of Common Stock)

The net proceeds from the Common Stock Offering, after deducting underwriting discounts and commissions and estimated offering expenses, will be approximately $847.3 million (or approximately $974.7 million if the underwriters of the Common Stock Offering exercise in full their option to purchase additional shares of Common Stock)

CUSIP / ISIN:

101137 107 / US1011371077

Joint Bookrunners:

J.P. Morgan Securities LLC
BofA Securities, Inc.
Citigroup Global Markets Inc.
Goldman Sachs & Co. LLC
Wells Fargo Securities, LLC
Morgan Stanley & Co. LLC
Barclays Capital Inc.
RBC Capital Markets, LLC

Co-Managers:

Cowen and Company, LLC
Evercore Group L.L.C.
Stifel, Nicolaus & Company, Incorporated
SVB Leerink LLC
Scotia Capital (USA) Inc.

Mandatory Convertible Preferred Stock Offering

Title of Securities:

5.50% Mandatory Convertible Preferred Stock, Series A, par value $0.01 per share, of the Issuer (the “Mandatory Convertible Preferred Stock”)

Number of Shares of Mandatory Convertible Preferred Stock Offered:

8,750,000 shares (or 10,062,500 shares if the underwriters of the Mandatory Convertible Preferred Stock Offering exercise in full their over-allotment option to purchase additional shares of Mandatory Convertible Preferred Stock)

Public Offering Price:

$100.00 per share of Mandatory Convertible Preferred Stock

Underwriting Discount:

$3.00 per share of Mandatory Convertible Preferred Stock

$26,250,000 in aggregate (or $30,187,500 in aggregate if the underwriters of the Mandatory Convertible Preferred Stock Offering exercise in full their option to purchase additional shares of Mandatory Convertible Preferred Stock)

Initial Price:

$100.00, divided by the Maximum Conversion Rate (as defined below), which is initially $34.25 and equal to the Common Stock Public Offering Price per share in the concurrent Common Stock Offering described above

Threshold Appreciation Price:

$100.00, divided by the Minimum Conversion Rate (as defined below), which is initially $41.96, which represents an approximate 22.50% appreciation of the Initial Price

Mandatory Conversion Date:

The second business day immediately following the last Trading Day of the Settlement Period. The Mandatory Conversion Date is expected to be June 1, 2023.

Conversion Rate:

Upon conversion on the Mandatory Conversion Date, the conversion rate for each share of Mandatory Convertible Preferred Stock will not be more than 2.9197 shares of the Issuer’s Common Stock (the “Maximum Conversion Rate”) and not less than 2.3834 shares of its Common Stock (the “Minimum Conversion Rate”), depending on the Applicable Market Value of its Common Stock, as described below, and subject to certain anti-dilution adjustments.

The “Applicable Market Value” of the Issuer’s Common Stock is the Average VWAP per share of its Common Stock over the 20 consecutive Trading Day period commencing on, and including, the 21st Scheduled Trading Day immediately preceding June 1, 2023 (the “Settlement Period”). The conversion rate will be calculated as described in the Mandatory Convertible Preferred Stock Preliminary Prospectus Supplement and the following table illustrates hypothetical conversion rates per share of the Mandatory Convertible Preferred Stock (assuming no anti-dilution adjustments and assuming that dividends are declared and paid in cash and subject to the provisions described in the Mandatory Convertible Preferred Stock Preliminary Prospectus Supplement with respect to any fractional share of Common Stock).

Assumed
Applicable Market Value
of Common Stock

Conversion Rate (number of shares of
Common Stock to be received upon
mandatory conversion of each share of
the Mandatory Convertible Preferred
Stock)

Greater than the Threshold Appreciation Price

2.3834 shares of Common Stock, which is the Minimum Conversion Rate

Equal to or less than the Threshold Appreciation Price but greater than or equal to the Initial Price

Between 2.3834 and 2.9197 shares of Common Stock, determined by dividing $100.00 by the Applicable Market Value

Less than the Initial Price

2.9197 shares of Common Stock, which is the Maximum Conversion Rate

Early Conversion at the Option of the Holder:

Other than during a Fundamental Change Conversion Period, at any time prior to June 1, 2023, holders of the Mandatory Convertible Preferred Stock have the option to elect to convert their shares of the Mandatory Convertible Preferred Stock, in whole or in part, at the Minimum Conversion Rate.

Conversion at the Option of the Holder
Upon Fundamental Change; Fundamental Change Dividend Make-Whole Amount:

If a Fundamental Change occurs on or prior to June 1, 2023, holders of the Mandatory Convertible Preferred Stock will have the right during the Fundamental Change Conversion Period to convert their shares of the Mandatory Convertible Preferred Stock, in whole or in part, into shares of Common Stock (or Units of Exchange Property as described in the Mandatory Convertible Preferred Stock Preliminary Prospectus) at the Fundamental Change Conversion Rate described below.

Holders who convert their Mandatory Convertible Preferred Stock within the Fundamental Change Conversion Period will also receive (1) a “Fundamental Change Dividend Make-Whole Amount” equal to the present value (calculated using a discount rate of 5.00% per annum) of all dividend payments (excluding any Accumulated Dividend Amount) on their shares of the Mandatory Convertible Preferred Stock for (i) the partial dividend period, if any, from, and including, the Fundamental Change Effective Date to, but excluding, the next Dividend Payment Date and (ii) all remaining full dividend periods from, and including, the Dividend Payment Date following the Fundamental Change Effective Date to, but excluding, the Mandatory Conversion Date, as described in the Mandatory Convertible Preferred Stock Preliminary Prospectus, and (2) the Accumulated Dividend Amount, which equals the aggregate amount of accumulated and unpaid dividends, if any, that have not been declared for dividend periods prior to the relevant Fundamental Change Effective Date, including (but subject to certain exceptions) for the partial dividend period, if any, from, and including, the Dividend Payment Date immediately preceding such Fundamental Change Effective Date to, but excluding, such Fundamental Change Effective Date.

The Issuer may satisfy the Fundamental Change Dividend Make-Whole Amount and/or the Accumulated Dividend Amount in cash, by delivery of shares of Common Stock or through any combination of cash and shares of Common Stock, as determined by the Issuer in its sole discretion, subject to the limitations in its Term Loans and Revolving Credit Facility that contain a restriction on its ability to pay cash distributions on its capital stock. The Issuer intends to use a portion of the net proceeds from the Mandatory Convertible Preferred Stock Offering and the Common Stock Offering to repay in full remaining borrowings under, and terminate, the April 2021 Term Loan. Following consummation of the Mandatory Convertible Preferred Stock Offering, the Issuer intends to seek amendments to its Revolving Credit Facility and the February 2021 Term Loan to permit it to pay cash dividends and other distributions on the Mandatory Convertible Preferred Stock. There can be no assurance that the Issuer will be successful in securing any such amendment.

Fundamental Change Conversion Rate:

The following table sets forth the Fundamental Change Conversion Rate per share of the Mandatory Convertible Preferred Stock for each Fundamental Change Share Price and Fundamental Change Effective Date set forth below:

Fundamental
Change
Effective Date

Fundamental Change Share Price

$10.00

$15.00

$20.00

$25.00

$30.00

$34.25

$37.50

$40.00

$41.96

$45.00

$50.00

$55.00

$60.00

$75.00

$100.00

May 27, 2020

2.8542

2.7933

2.7095

2.6255

2.5532

2.5037

2.4729

2.4529

2.4394

2.4214

2.3988

2.3828

2.3715

2.3544

2.3477

June 1, 2021

2.8856

2.8539

2.7863

2.6998

2.6145

2.5520

2.5122

2.4863

2.4687

2.4455

2.4169

2.3973

2.3842

2.3660

2.3601

June 1, 2022

2.9050

2.9007

2.8724

2.8033

2.7052

2.6193

2.5610

2.5225

2.4965

2.4633

2.4248

2.4014

2.3878

2.3739

2.3716

June 1, 2023

2.9197

2.9197

2.9197

2.9197

2.9197

2.9197

2.6667

2.5000

2.3834

2.3834

2.3834

2.3834

2.3834

2.3834

2.3834

·

if the Fundamental Change Share Price is between two Fundamental Change Share Prices in the table or the Fundamental Change Effective Date is between two Fundamental Change Effective Dates in the table, the Fundamental Change Conversion Rate will be determined by a straight-line interpolation between the Fundamental Change Conversion Rates set forth for the higher and lower Fundamental Change Share Price amounts and the earlier and later Fundamental Change Effective Dates, as applicable, based on a 365- or 366-day year, as applicable;

·

if the Fundamental Change Share Price is in excess of $100.00 per share (subject to adjustment in the same manner as the Fundamental Change Share Prices set forth in the first row of the table above), then the Fundamental Change Conversion Rate will be the Minimum Conversion Rate; and

·

if the Fundamental Change Share Price is less than $10.00 per share (subject to adjustment in the same manner as the Fundamental Change Share Prices set forth in the first row of the table above), then the Fundamental Change Conversion Rate will be the Maximum Conversion Rate.

Floor Price:

Initially $11.9875 (approximately 35% of the Initial Price), subject to adjustment as described in the Mandatory Convertible Preferred Stock Preliminary Prospectus.

Maximum Number of Shares of Common Stock Issuable Upon Conversion (Exclusive of Shares Issuable as Payment of Dividends):

25,547,375 shares (or 29,379,482 shares if the underwriters of the Mandatory Convertible Preferred Stock Offering exercise in full their option to purchase additional shares of Mandatory Convertible Preferred Stock)

Symbol/Exchange:

The Issuer intends to apply to list the Mandatory Convertible Preferred Stock on the NYSE under the symbol “BSX PR A” and, if approved, the Issuer expects trading to commence within 30 days of the first original issue date of the Mandatory Convertible Preferred Stock

CUSIP / ISIN:

101137 206 / US1011372067

Bookrunners:

J.P. Morgan Securities LLC

BofA Securities, Inc.

Citigroup Global Markets Inc.

Goldman Sachs & Co. LLC

Wells Fargo Securities, LLC

Morgan Stanley & Co. LLC

Barclays Capital Inc.

RBC Capital Markets, LLC

Co-Managers:

BNP Paribas Securities Corp.

DNB Markets, Inc.

MUFG Securities Americas Inc.

SG Americas Securities, LLC

Standard Chartered Bank

TD Securities (USA) LLC

U.S. Bancorp Investments, Inc.