| Item 1.01 | Entry into a Material Definitive Agreement. |
Senior Notes Indenture and Officer’s Certificate
On June 23, 2022, KLA Corporation (the “Company”) issued $1,000,000,000 aggregate principal amount of its 4.650% Senior Notes due 2032 (the “2032 Notes”), $1,200,000,000 aggregate principal amount of its 4.950% Senior Notes due 2052 (the “2052 Notes”), and $800,000,000 aggregate principal amount of its 5.250% Senior Notes due 2062 (the “2062 Notes” and, together with the 2032 Notes and the 2052 Notes, the “Notes”) pursuant to an Indenture, dated as of June 23, 2022 (the “Indenture”), between the Company and U.S. Bank Trust Company, National Association, as trustee. The Notes were offered and sold in a public offering pursuant to the Company’s registration statement on Form S-3 (File No. 333-265497) (the “Registration Statement”), including the base prospectus contained therein, filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), a preliminary prospectus supplement, dated June 21, 2022 and a related final prospectus supplement, dated June 21, 2022.
The material terms of and conditions of each series of Notes are set forth in an Officer’s Certificate, dated June 23, 2022 (the “Officer’s Certificate”).
The 2032 Notes bear interest at a rate of 4.650% per year and will mature on July 15, 2032, the 2052 Notes bear interest at a rate of 4.950% per year and will mature on July 15, 2052, and the 2062 Notes bear interest at a rate of 5.250% per year and will mature on July 15, 2062. Interest on the Notes is payable on January 15 and July 15 of each year, beginning on January 15, 2023.
The Company may redeem an applicable series of Notes, in whole or in part, at any time and from time to time prior to the applicable Par Call Date (as defined below), at a redemption price equal to the greater of (i) 100% of the principal amount of the Notes to be redeemed and (ii) (a) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the relevant redemption date (assuming the Notes of such series matured on the applicable Par Call Date) on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the then current Treasury Rate (as defined in the Officer’s Certificate) plus 25 basis points in the case of the 2032 Notes, 25 basis points in the case of the 2052 Notes or 30 basis points in the case of the 2062 Notes, less (b) interest accrued to the date of redemption, plus, under either prong (i) or (ii) above, interest accrued to the redemption date.
In addition, the Company may redeem any applicable series of Notes, in whole or in part and from time to time on or after the applicable Par Call Date, at a redemption price equal to 100% of the principal amount of the Notes redeemed, plus interest accrued the date of redemption. The Notes are unsecured and rank equally in right of payment with all of the Company’s other unsecured and unsubordinated indebtedness.
“Par Call Date” means (i) with respect to the 2032 Notes, April 15, 2032 (three months prior to the maturity date of the 2032 Notes), (ii) with respect to the 2052 Notes, January 15, 2052 (six months prior to the maturity date of the 2052 Notes) and (iii) with respect to the 2062 Notes, January 15, 2062 (six months prior to the maturity date of the 2062 Notes).
In addition, the Company may be required to repurchase the Notes upon the occurrence of a change of control triggering event, as set forth in the Indenture.
The Indenture contains limited affirmative and negative covenants of the Company. The negative covenants restrict the ability of the Company and certain of its subsidiaries to incur liens on Principal Property (as defined in the Indenture) or the capital stock or indebtedness of certain subsidiaries; to engage in sale and lease-back transactions with respect to any Principal Property; and to consolidate, merge or convey, sell, transfer, lease or otherwise dispose of all or substantially all of its properties and assets.
The Indenture contains customary events of default, following the occurrence and continuance of which, the trustee or the holders of not less than 25% in aggregate principal amount of such series of Notes then outstanding may declare the principal of, premium, if any, and accrued interest on all Notes of such series through the date of such declaration immediately due and payable.
