ZTS · 10-Q · 2026Q2 · Full report

Convertible Senior Notes

Zoetis Inc. · 2026-08-06 · Importance 64 · Surprise 42 · In source text

Zoetis completed a $2.0 billion private offering of 0.250% convertible senior notes on December 18, 2025, with maturity on June 15, 2029 and an initial conversion price of approximately $148.20 per share. Net proceeds totaled $1,970 million after $30 million of issuance discounts and expenses. The company used $187 million for capped-call transactions, $248 million to repurchase approximately 2.1 million shares concurrently with the offering, and the remaining $1,535 million to repurchase 12.3 million additional shares by March 31, 2026. Separately, on August 18, 2025, Zoetis issued $850 million of 4.150% notes due 2028 and $1.0 billion of 5.000% notes due 2035, using proceeds partly to redeem $1.35 billion of notes due in 2025.

Key facts

• On December 18, 2025 Zoetis completed a private offering of 0.250% convertible senior notes with an aggregate principal amount of $2.0 billion and a maturity date of June 15, 2029. source
• The convertible senior notes include $250 million issued pursuant to the initial purchasers’ option to purchase additional notes, exercised in full for settlement on December 18, 2025. source
• The net proceeds from the convertible senior notes offering were $1,970 million after deducting initial purchasers’ discounts and expenses of $30 million. source
• Zoetis entered into capped call transactions with strike prices of approximately $148.20 per share and initial cap prices of approximately $211.72 per share covering approximately 13.5 million shares of common stock. source
• Outstanding 2025 Convertible Senior Notes due 2029 have an interest rate of 0.250% and aggregate principal amount $2,000 million. source
• Zoetis used $187 million of the convertible offering net proceeds to fund the cost of entering into capped call transactions. source
• The cost of the capped calls was $187 million net of $42 million in deferred tax assets and was recorded as a decrease to Additional paid-in capital as of December 31, 2025. source
• The convertible senior notes are convertible at an initial conversion price of approximately $148.20 per share of common stock. source

Impact estimates