| Item 1.01 | Entry into a Material Definitive Agreement. |
On November 28, 2023, Zimmer Biomet Holdings, Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with Barclays Capital Inc., Goldman Sachs & Co. LLC, Mizuho Securities USA LLC and Morgan Stanley & Co. LLC, as representatives of the underwriters named therein (collectively, the “Underwriters”), in connection with the public offering of $500.0 million aggregate principal amount of the Company’s 5.350% Note due 2028 (the “Notes”). The issuance of the Notes was completed on December 1, 2023.
The Underwriting Agreement contains representations and warranties, covenants and conditions that are customary for transactions of this type. In addition, the Company has agreed to indemnify the Underwriters against certain liabilities on customary terms.
Some of the Underwriters and their affiliates have engaged in, and may in the future engage in, commercial banking, financial advisory, investment banking, lending and other commercial dealings in the ordinary course of their business with the Company or its affiliates, including participating as lenders under the Company’s credit facilities, for which they have received, and may in the future receive, customary fees and commissions. To the extent that a portion of the net proceeds from the offering of the Notes is used to repay the Company’s other indebtedness, such Underwriters or their affiliates would receive a portion of those net proceeds.
The Notes were issued pursuant to the Ninth Supplemental Indenture dated as of December 1, 2023 (the “Supplemental Indenture”), to the Company’s Indenture (the “Base Indenture”) dated as of November 17, 2009, between the Company and Computershare Trust Company, N.A., as successor to Wells Fargo Bank, National Association, as trustee. For a description of the material terms of the Supplemental Indenture and the Notes, see the information set forth below under Item 2.03, which is incorporated into this Item 1.01.
The offering of the Notes was made pursuant to the Registration Statement on Form S-3 (Registration No. 333-263051), the prospectus dated February 25, 2022, and the related prospectus supplement dated November 28, 2023.
Copies of the Underwriting Agreement, the Base Indenture and the Supplemental Indenture are attached hereto as Exhibits 1.1, 4.1 and 4.2, respectively, and are incorporated herein by reference.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth above under Item 1.01 is incorporated into this Item 2.03.
The Notes bear interest at a rate of 5.350% per annum, which interest will be payable semi-annually in arrears on June 1 and December 1 of each year, commencing on June 1, 2024. Interest will be paid to the holders of record of the Notes at the close of business on the May 15 and November 15, respectively, immediately preceding the related interest payment date. The Notes will mature on December 1, 2028.
Prior to November 1, 2028 (the “Par Call Date”), the Company may redeem the Notes at its option, in whole or in part, at any time and from time to time, at a redemption price (expressed as a percentage of principal amount and rounded to three decimal places) equal to the greater of:
| | (1) | (a) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date (assuming the Notes matured on the Par Call Date) on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined in the Supplemental Indenture), plus 20 basis points less (b) interest accrued to the date of redemption; and |
| | (2) | 100% of the principal amount of the Notes to be redeemed; |
plus, in either case, accrued and unpaid interest thereon to the redemption date.
