| Item 1.01. | Entry into a Material Definitive Agreement. |
Notes Offering
On September 29, 2020, Medtronic Global Holdings S.C.A. (“Medtronic Luxco”), an indirect wholly owned subsidiary of Medtronic public limited company (“Medtronic plc”), issued €1,250,000,000 aggregate principal amount of 0.000% Senior Notes due 2023 (the “2023 Notes”), €1,000,000,000 aggregate principal amount of 0.000% Senior Notes due 2025 (the “2025 Notes”), €1,000,000,000 aggregate principal amount of 0.375% Senior Notes due 2028 (the “2028 Notes”), €1,000,000,000 aggregate principal amount of 0.750% Senior Notes due 2032 (the “2032 Notes”), €1,000,000,000 aggregate principal amount of 1.375% Senior Notes due 2040 (the “2040 Notes”), and €1,000,000,000 aggregate principal amount of 1.625% Senior Notes due 2050 (the “2050 Notes”, and together with the 2023 Notes, the 2025 Notes, the 2028 Notes, the 2032 Notes and the 2040 Notes, the “Notes”), in an underwritten offering (the “Offering”) pursuant to a registration statement on Form S-3 (the “Registration Statement”) (File No. 333-236739) filed with the Securities and Exchange Commission (the “Commission”) on February 28, 2020, and a preliminary prospectus supplement and prospectus supplement filed with the Commission related to the offering of the Notes. The Notes are fully and unconditionally guaranteed by Medtronic plc and Medtronic, Inc., an indirect wholly owned subsidiary of Medtronic plc (the “Guarantees,” and together with the Notes, the “Securities”).
Medtronic Luxco expects that the net proceeds from the Offering will be approximately €6.2 billion, after deducting the underwriting discount and estimated offering expenses payable by Medtronic Luxco. The net proceeds of the Offering will be used to repay Medtronic Luxco’s Floating Rate Senior Notes due 2021 at maturity on March 7, 2021 and to redeem all or a portion of certain series of outstanding notes issued by Medtronic Luxco, Medtronic, Inc. or Covidien International Finance S.A. Any remaining net proceeds of the Offering will be used for repayment of other indebtedness and general corporate purposes.
The Company has applied to list each series of Notes on the New York Stock Exchange.
Indenture and Agency Agreement
The Notes were issued under an indenture dated as of March 28, 2017 (the “Base Indenture”), among Medtronic Luxco, Medtronic, Inc., Medtronic plc and Wells Fargo Bank, N.A., as trustee (the “Trustee”), as supplemented by the Fourth Supplemental Indenture dated as of September 29, 2020 (the “Fourth Supplemental Indenture” and together with the Base Indenture, the “Indenture”), among Medtronic Luxco, Medtronic, Inc., Medtronic plc, the Trustee and Elavon Financial Services DAC, as paying agent (“Elavon”), and shall be subject to the Agency Agreement dated as of September 29, 2020 (the “Agency Agreement”) between the Company and Elavon.
The 2023 Notes will mature on March 15, 2023, the 2025 Notes will mature on October 15, 2025, the 2028 Notes will mature on October 15, 2028, the 2032 Notes will mature on October 15, 2032, the 2040 Notes will mature on October 15, 2040, and the 2050 Notes will mature on October 15, 2050. The 2023 Notes will bear interest at a rate of 0.000% per annum. The 2025 Notes will bear interest at a rate of 0.000% per annum. The 2028 Notes will bear interest at a rate of 0.375% per annum. The 2032 Notes will bear interest at a rate of 0.750% per annum. The 2040 Notes will bear interest at a rate of 1.375% per annum. The 2050 Notes will bear interest at a rate of 1.625% per annum.
At any time prior to maturity, in the case of the 2023 Notes, and prior to the applicable Par Call Date (as defined below), in the case of the 2025 Notes, the 2028 Notes, the 2032 Notes, the 2040 Notes and the 2050 Notes, Medtronic Luxco will have the right, at its option, to redeem any series of the Notes, in whole or in part, at any time and from time to time, at a redemption price equal to the greater of 100% of the principal amount of the Notes to be redeemed and a specified make-whole redemption price, in either case plus accrued and unpaid interest to, but not including, the date of redemption. “Par Call Date” means September 15, 2025 (one month prior to the maturity date of the 2025 Notes), in the case of the 2025 Notes; July 15, 2028 (three months prior to the maturity date of the 2028 Notes), in the case of the 2028 Notes; July 15, 2032 (three months prior to the maturity date of the 2032 Notes), in the case of the 2032 Notes; April 15, 2040 (six months prior to the maturity date of the 2040 Notes), in the case of the 2040 Notes; and April 15, 2050 (six months prior to the maturity date of the 2050 Notes), in the case of the 2050 Notes.
In addition, on and after the applicable Par Call Date, Medtronic Luxco will have the option to redeem any series of the Notes, in whole at any time or in part from time to time, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption.
The Notes will be general unsecured senior obligations of Medtronic Luxco and will rank equally in right of payment with all of Medtronic Luxco’s other existing and future unsecured senior indebtedness and will rank senior to any subordinated indebtedness that Medtronic Luxco may incur. The Guarantees will rank equally in right of payment with all of Medtronic plc’s and Medtronic, Inc.’s other existing and future unsecured senior indebtedness and will rank senior to any subordinated indebtedness from time to time outstanding that Medtronic plc or Medtronic, Inc. may incur, and be structurally subordinated to all existing and any future obligations of each of Medtronic plc’s subsidiaries (other than Medtronic Luxco and Medtronic, Inc.).
