On August 23, 2021 Thermo Fisher Scientific Inc. (the "Company") reported that it issued $700,000,000 aggregate principal amount of 1.750% Senior Notes due 2028 (the "2028 Notes"), $1,200,000,000 aggregate principal amount of 2.000% Senior Notes due 2031 (the "2031 Notes") and $1,200,000,000 aggregate principal amount of 2.800% Senior Notes due 2041 (the "2041 Notes" and, together with the 2028 Notes and the 2031 Notes, the "Notes") in a public offering (the "Offering") pursuant to a registration statement on Form S-3 (File No. 333-229951) and a preliminary prospectus supplement and prospectus supplement related to the offering of the Notes, each as previously filed with the Securities and Exchange Commission (the "SEC") (Filing, 8-K, Thermo Fisher Scientific, AUG 23, 2021, View Source [SID1234586813]).
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The Notes were issued under an indenture, dated as of November 20, 2009 (the "Base Indenture"), and the Twenty-Second Supplemental Indenture, dated as of August 23, 2021 (the "Supplemental Indenture" and, together with the Base Indenture, the "Indenture"), between the Company, as issuer, and The Bank of New York Mellon Trust Company, N.A., as trustee.
The 2028 Notes will mature on October 15, 2028, the 2031 Notes will mature on October 15, 2031, and the 2041 Notes will mature on October 15, 2041. Interest on the Notes will be paid semi-annually in arrears on April 15 and October 15 of each year, commencing on April 15, 2022.
Prior to August 15, 2028 in the case of the 2028 Notes (two months prior to their maturity), July 15, 2031 in the case of the 2031 Notes (three months prior to their maturity) and April 15, 2041 in the case of the 2041 Notes (six months prior to their maturity) (each, a "Par Call Date"), the Company may redeem each series of 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 of such series 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 of such series 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 the 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 (as defined in the Indenture) plus 10 basis points, in the case of the 2028 Notes, 15 basis points, in the case of the 2031 Notes, and 15 basis points, in the case of the 2041 Notes, plus, in each case, accrued and unpaid interest on the Notes of such series being redeemed, if any, to, but excluding, the date of redemption.
In addition, on and after the applicable Par Call Date, the Company may redeem some or all of the Notes 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.
Upon the occurrence of a change of control (as defined in the Indenture) of the Company and a contemporaneous downgrade of the Notes below an investment grade rating by at least two of Moody’s Investors Service, Inc., S&P Global Ratings, a division of S&P Global, Inc., and Fitch Ratings, Limited, the Company will, in certain circumstances, be required to make an offer to purchase the Notes at a price equal to 101% of the principal amount of the Notes, plus any accrued and unpaid interest to, but excluding, the date of repurchase.
The Notes are general unsecured obligations of the Company. The Notes rank equally in right of payment with existing and any future unsecured and unsubordinated indebtedness of the Company and rank senior in right of payment to any existing and future indebtedness of the Company that is subordinated to the Notes. The Notes are also effectively subordinated to any existing and future secured indebtedness of the Company to the extent of the assets securing such indebtedness, and are structurally subordinated to all existing and any future indebtedness and any other liabilities of its subsidiaries.
The Indenture contains limited affirmative and negative covenants of the Company. The negative covenants restrict the ability of the Company and its subsidiaries to incur debt secured by liens on Principal Properties (as defined in the Indenture) or on shares of stock of the Company’s Principal Subsidiaries (as defined in the Indenture) and engage in sale and lease-back transactions with respect to any Principal Property. The Indenture also limits the ability of the Company to merge or consolidate or sell all or substantially all of its assets.
Upon the occurrence of an event of default under the Indenture, which includes payment defaults, defaults in the performance of affirmative and negative covenants, bankruptcy and insolvency related defaults and failure to pay certain indebtedness, the obligations of the Company under the Notes may be accelerated, in which case the entire principal amount of the Notes would be immediately due and payable.
Wilmer Cutler Pickering Hale and Dorr LLP, counsel to the Company, has issued an opinion to the Company, dated August 23, 2021, regarding the Notes. A copy of this opinion is filed as Exhibit 5.1 hereto.
The foregoing description is qualified in its entirety by reference to the full text of the Base Indenture and the Supplemental Indenture, which are filed with this report as Exhibits 4.1 and 4.2 hereto, respectively. Each of the foregoing documents is incorporated herein by reference.
The sale of the Notes was made pursuant to the terms of an Underwriting Agreement, which the Company entered into on August 9, 2021 (the "Underwriting Agreement"), with Barclays Capital Inc., Morgan Stanley & Co. LLC, BofA Securities, Inc. and Citigroup Global Markets Inc., as representatives of the several underwriters named in Schedule A to the Underwriting Agreement.
The Company expects that the net proceeds from the sale of the Notes will be approximately $3.05 billion, after deducting underwriting discounts and estimated offering expenses. The Company intends to use the net proceeds of the Offering to pay a portion of the cash consideration payable for the previously announced acquisition of PPD, Inc (the "PPD Acquisition"). The PPD Acquisition is subject to the satisfaction of customary closing conditions, including the receipt of applicable regulatory approvals. Pending completion of the PPD Acquisition, the Company may also determine to use a portion of the net proceeds of the Offering for general corporate purposes, which may include the acquisition of companies or businesses, repayment and refinancing of debt, working capital and capital expenditures or the repurchase of its outstanding equity securities or the Company may temporarily invest the net proceeds in short-term, liquid investments until they are used for their ultimate purpose.
The foregoing description is qualified in its entirety by reference to the full text of the Underwriting Agreement, which is filed with this report as Exhibit 1.1 hereto and is incorporated herein by reference.