| Item 1.01. | Entry into a Material Definitive Agreement. |
Notes Offering
On March 30, 2023, Medtronic Global Holdings S.C.A. (“Medtronic Luxco”), an indirect wholly owned subsidiary of Medtronic public limited company (“Medtronic plc”), issued $1,000,000,000 aggregate principal amount of its 4.250% Senior Notes due 2028 (the “2028 Notes”) and $1,000,000,000 aggregate principal amount of its 4.500% Senior Notes due 2033 (the “2033 Notes” and together with the 2028 Notes, the “Notes”), in an underwritten offering (the “Offering”) pursuant to a registration statement on Form S-3 (the “Registration Statement”) (File No. 333-270272) filed with the Securities and Exchange Commission (the “Commission”) on March 3, 2023, 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 to receive net proceeds from the Offering of approximately $1.98 billion, after deducting the underwriting discount and estimated offering expenses payable by Medtronic Luxco. Medtronic Luxco expects to use the net proceeds of the Offering to prepay a portion of the ¥297 billion, or approximately $2.3 billion, of indebtedness outstanding under the Japanese-yen denominated term loan agreement by and among Medtronic Luxco, Medtronic plc, Medtronic, Inc., and Mizuho Bank, Ltd. as administrative agent and as lender (the “JPY term loan”).
Indenture
The Notes were issued under an indenture dated as of March 28, 2017 (the “Base Indenture”), among Medtronic Luxco, Medtronic, Inc., Medtronic plc and Computershare Trust Company, N.A., as successor to Wells Fargo Bank, N.A., as trustee (the “Trustee”), as amended by the Sixth Supplemental Indenture dated as of February 22, 2023 (the “Sixth Supplemental Indenture”) among Medtronic Luxco, Medtronic, Inc., Medtronic plc and the Trustee, and as supplemented by the Seventh Supplemental Indenture dated as of March 30, 2023 (the “Seventh Supplemental Indenture” and together with the Sixth Supplemental Indenture and the Base Indenture, the “Indenture”) among Medtronic Luxco, Medtronic, Inc., Medtronic plc and the Trustee.
The 2028 Notes will mature on March 30, 2028 and the 2033 Notes will mature on March 30, 2033. The 2028 Notes will bear interest at a rate of 4.250% per annum. The 2033 Notes will bear interest at a rate of 4.500% per annum.
Prior to the applicable Par Call Date (as defined below), 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 the greater of (1) 100% of the principal amount of the Notes to be redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest in respect of the Notes being redeemed (not including any portion of the payments of interest accrued but unpaid as of the date of redemption and assuming that such Notes to be redeemed matured on their applicable Par Call Date), discounted to the date of redemption on a semi-annual basis (assuming a 360-day year of twelve 30-day months), at the treasury rate plus 15 basis points in the case of the 2028 Notes and 20 basis points in the case of the 2033 Notes, plus, in each case, accrued and unpaid interest thereon, if any, to, but excluding, the date of redemption. “Par Call Date” means: February 29, 2028 in the case of the 2028 Notes and December 30, 2032 in the case of the 2033 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, in each case, 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
