Item 1.01. Entry into a Material Definitive Agreement.
On July 27, 2020, Freeport-McMoRan Inc., a Delaware corporation (FCX), as issuer, and Freeport-McMoRan Oil & Gas LLC, a Delaware limited liability company, as guarantor (Guarantor), completed the sale of its previously announced $650 million aggregate principal amount of 4.375% Senior Notes due 2028 (the 2028 Senior Notes) and $850 million aggregate principal amount of 4.625% Senior Notes due 2030 (the 2030 Senior Notes and, together with the 2028 Senior Notes, the Notes). The Notes are guaranteed by the Guarantor (the Guarantees and, together with the Notes, the Securities). The Securities are FCX and the Guarantor’s senior unsecured obligations and will rank senior in right of payment to any subordinated indebtedness that FCX or the Guarantor may incur in the future and equally in right of payment with all of the existing and future unsecured and unsubordinated indebtedness of FCX and the Guarantor.
The Securities were offered pursuant to a prospectus supplement dated July 13, 2020, to the prospectus dated August 1, 2019, that forms a part of FCX’s effective Registration Statement on Form S-3, as amended (File No. 333-226675), filed by FCX with the Securities and Exchange Commission under the Securities Act of 1933, as amended.
The Notes were issued pursuant to an Indenture dated as of August 15, 2019 (the Base Indenture), between FCX and U.S. Bank National Association, as trustee (the Trustee), as supplemented by the sixth supplemental indenture and the seventh supplemental indenture, each dated as of July 27, 2020, among FCX, the Guarantor and the Trustee (collectively, the Supplemental Indentures and together with the Base Indenture, the Indenture).
The 2028 Senior Notes will mature on August 1, 2028, and the 2030 Senior Notes will mature on August 1, 2030. Interest will accrue at a rate of 4.375% per annum for the 2028 Senior Notes and 4.625% per annum for the 2030 Senior Notes, in each case, from July 27, 2020. Interest on each of the 2028 Senior Notes and the 2030 Senior Notes is payable on February 1 and August 1 of each year, commencing on February 1, 2021. FCX may redeem some or all of the Notes at any time and from time to time at the redemption prices set forth in the Indenture, as applicable.
The Indenture contains covenants that restrict FCX’s ability, with certain exceptions, to (i) incur debt secured by liens, (ii) engage in sale and leaseback transactions and (iii) merge or consolidate with or into another entity, or sell, transfer or lease all or substantially all of its properties and assets. These covenants are subject to a number of important exceptions and qualifications, as described in the Indenture.
In the ordinary course of their businesses, affiliates of the Trustee have engaged in commercial banking transactions with FCX and its subsidiaries, and may in the future engage in commercial banking and other transactions with FCX and its subsidiaries.
The foregoing descriptions of the Indenture and the Securities are not intended to be complete and are qualified in their entirety by reference to the Indenture and the forms of the Notes, copies of which are attached as Exhibits 4.1, 4.2, 4.3, 4.4 and 4.5 to this Current Report on Form 8-K and each of which is incorporated by reference herein.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information in Item 1.01 of this Form 8-K is hereby incorporated by reference into this Item 2.03.
Item 8.01. Other Events.
A copy of the opinion of Davis Polk & Wardwell LLP, counsel to FCX, relating to the legality of the Securities is filed as Exhibit 5.1 hereto.
FCX issued two press releases dated July 27, 2020, announcing, among other things, (1) that FCX has completed the sale of $1.5 billion of senior notes (see Exhibit 99.1); and (2) the early results of FCX’s offers to purchase certain outstanding senior notes and extension of the early tender premium (see Exhibit 99.2).
Copies of the press releases are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated into this Item 8.01 by reference.
