Medtech giant Medtronic has formally agreed to borrow more than $16 billion from a group of lenders led by Bank of America to acquire health care supplier Covidien early next year.

Executives at Fridley-based Medtronic never intended to borrow so much money to finance the $43 billion deal, and new filings with the Securities and Exchange Commission say the costs of the deal are escalating. The additional financing was added after the Treasury department changed federal regulations in September to reduce the tax benefits in deals like Medtronic's, which would move the combined firm to low-tax Ireland early next year.

In a 1,000-page securities filing Monday, Medtronic said the $260 million it had previously estimated in transaction-related costs now will not include fees and expenses related to financing. Previously, the company had listed same dollar amount but said it would include the expenses of financing.

The new costs are not specifically estimated. The interest rate on the loans will be variable, depending on changes in the U.S. prime rate and an English benchmark rate, the London Interbank Offered Rate.

The $16.3 billion in debt inked to pay for the deal includes a $5 billion, three-year term loan and another $11.3 billion in potential one-year bridge loans that would be quickly refinanced with other debt, the filing Monday said.

An existing $2.8 billion line of credit, taken out before the tax-law changes, was terminated. That credit was secured over the summer, when Medtronic was planning to use its $13.5 billion in overseas cash to pay Covidien's shareholders. That plan to use overseas cash was jettisoned after federal tax officials announced changes that would apply taxes on loans of overseas cash that would have cost Medtronic more than $3.5 billion in "repatriation" taxes.

Medtronic executives aim to vastly broaden the profile of their high-technology medical-device company by acquiring Covidien, a global seller of surgical and hospital supplies and devices.

Although tax advantages from the deal have dominated public discussion, company officials say a broader product catalog and expanded global sales will generate greater future returns for both companies. Medtronic and Covidien are large players in their respective specialties today, yet their businesses overlap very little, which could ease antitrust concerns.

Late October Covidien announced plans to sell off its right to make and sell one product the companies have in common, which is trial-stage drug-coated surgical balloon catheters for minimally invasive peripheral artery procedures.

Covidien agreed to sell the rights and equipment for its trial-stage line of balloon catheters known as Stellarex for $30 million Colorado-based Spectranetics. Stellarex, which has development connections among Covidien's Minnesota workforce, could receive European approval early 2015 and U.S. approval two years later.

The Federal Trade Commission has made a second request for information about the Medtronic-Covidien deal, which means federal trade officials are giving it close scrutiny. Antitrust officials in China have also put the deal in the second stage of review, rather than approving it at the first stage for approval under China's Anti-Monopoly Law. According to Medtronic's filings, clearance from several governments, including China's, may be required for the deal to be recognized in markets where Medtronic and Covidien obtain revenues.

Joe Carlson • 612-673-4779

Twitter: @_JoeCarlson