SHERIDAN, WYOMING – May 19, 2025 – Royal Philips (NYSE: PHG, AEX: PHIA), a global leader in health technology, has announced the successful pricing of a €1 billion dual-tranche bond issuance under its European Medium Term Note (EMTN) program, marking a strategic step to reinforce its capital structure and advance sustainable investment goals.
The offering consists of €500 million in fixed-rate notes due 2030 and another €500 million in notes due 2035. This financial move is designed to refinance existing 2026 debt maturities and fund eligible green projects as defined in the company’s Sustainable Finance Framework. With significant investor interest, both tranches were heavily oversubscribed—by more than three times for the 2030 notes and more than four times for the 2035 notes—underscoring strong market confidence in Philips’ long-term strategy and ESG commitments.
Strategic Financial Optimization with ESG Integration
Philips’ note issuance underscores a dual-purpose approach: strengthening its balance sheet while backing climate-resilient and energy-efficient initiatives. The net proceeds are earmarked for general corporate purposes, debt repayment, and the financing or refinancing of eligible green projects.
Key financial terms include:
- 2030 Notes: Issue price of 99.859%, 3.250% coupon, yield of 3.281%
- 2035 Notes: Issue price of 99.595%, 4.000% coupon, yield of 4.050%
The settlement and issuance of the notes are scheduled for May 23, 2025. Philips has applied to list the notes on the Official List of the Luxembourg Stock Exchange and to trade them on its regulated market.
Maintaining a Robust Credit Profile
As part of its ongoing fiscal discipline, Philips remains committed to preserving its investment-grade credit status. The company currently holds:
- A BBB+ rating from Standard & Poor’s (stable outlook)
- A Baa1 rating from Moody’s (stable outlook)
- A BBB+ rating from Fitch (stable outlook)
This positions Philips strongly in the eyes of institutional investors and reflects its resilient financial management, even amid ongoing macroeconomic pressures and a competitive global healthcare market.
Positioning for Long-Term Sustainability and Value Creation
The bond issuance aligns with broader industry trends as major players across health tech, manufacturing, and industrial sectors increasingly leverage sustainable finance to address environmental mandates and stakeholder expectations.
Philips' ability to attract significant investor demand reflects its:
- Solid reputation in the health technology sector
- Demonstrated commitment to environmental, social, and governance (ESG) principles
- Strategic financial planning to manage debt maturities efficiently
- Proactive investment in long-term, sustainable growth initiatives
The Sustainable Finance Framework underpinning this bond issuance is central to Philips’ ESG roadmap, enabling the company to invest in green technologies and infrastructure while ensuring returns for stakeholders.
Investor Confidence Highlights Market Trust
The oversubscription of both note tranches further confirms strong institutional appetite for stable, ESG-aligned investment opportunities. By proactively managing its debt portfolio and redirecting capital into sustainable projects, Philips is not only mitigating financial risk but also accelerating its journey toward a more sustainable and profitable future.
Learn more at www.philips.com