On November 25, 2019 (i) Teva Pharmaceutical Finance Netherlands II B.V. ("Teva Finance II"), a wholly owned subsidiary of Teva Pharmaceutical Industries Limited (the "Company"), issued €1,000,000,000 aggregate principal amount of 6.000% Senior Notes due 2025 (the "Euro Notes"); and (ii) Teva Pharmaceutical Finance Netherlands III B.V. ("Teva Finance III" and, together with Teva Finance II, the "Issuers"), a wholly owned subsidiary of the Company, issued $1,000,000,000 aggregate principal amount of 7.125% Senior Notes due 2025 (the "USD Notes" and, together with the Euro Notes, the "Notes") (Filing, 8-K, Teva, NOV 25, 2019, View Source [SID1234551653]).
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Teva intends to use the net proceeds from the Notes, together with cash on hand, to (i) fund the announced tender offer for a maximum combined aggregate purchase price (exclusive of accrued and unpaid interest but inclusive of tender premium) of up to $1,500,000,000 (ii) partially redeem €650,000,000 of the currently outstanding €1,660,154,000 aggregate principal amount of Teva Finance II’s 0.375% Senior Notes due 2020, (iii) pay fees and expenses in connection therewith and (iv) the extent of any remaining proceeds, for general corporate purposes, which may include the repayment of outstanding debt.
The Euro Notes were issued pursuant to a Senior Indenture, dated as of March 14, 2018 (the "Euro Notes Base Indenture"), by and among Teva Finance II, the Company, as guarantor, and The Bank of New York Mellon, as trustee, as supplemented by the Second Supplemental Indenture, dated as of November 25, 2019 (the "Euro Notes Supplemental Indenture" and, together with the Euro Notes Base Indenture, the "Euro Notes Indenture"), by and among Teva Finance II, the Company, as guarantor, The Bank of New York Mellon, as trustee, and The Bank of New York Mellon, London Branch, as paying agent. The USD Notes were issued pursuant to a Senior Indenture, dated as of March 14, 2018 (the "USD Notes Base Indenture"), as supplemented by the Second Supplemental Indenture, dated as of November 25, 2019 (the "USD Notes Supplemental Indenture" and, together with the USD Notes Base Indenture, the "USD Notes Indenture" and, together with the Euro Notes Indenture, the "Indentures"), in each case, by and among Teva Finance III, the Company, as guarantor, and The Bank of New York Mellon, as trustee.
Interest will be payable on the Notes semi-annually in arrears on January 31 and July 31 of each year, beginning on July 31, 2020, until their maturity date of January 31, 2025. The Euro Notes and the USD Notes are senior unsecured obligations of Teva Finance II and Teva Finance III, respectively, and the Notes are guaranteed on a senior unsecured basis by the Company.
Teva Finance II may redeem the Euro Notes, in whole or in part, at any time or from time to time, upon at least 10 days’, but not more than 60 days’, prior notice. The Euro Notes will be redeemable at a redemption price equal to the greater of (1) 100% of the principal amount of the Euro Notes to be redeemed or (2) the sum of the present values of the Remaining Scheduled Payments (as defined in the Euro Notes Indenture) of the Euro Notes being redeemed discounted, on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months), at the applicable Reinvestment Rate (as defined in the Euro Notes Indenture), plus accrued and unpaid interest thereon, if any (including Additional Interest, if any), to, but not including, the redemption date; provided that if Teva Finance II elects to redeem the Euro Notes at any time on or after October 31, 2024 (three months prior to the maturity date of the Euro Notes), Teva Finance II may redeem the Euro Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the Euro Notes then outstanding to be redeemed, plus accrued and unpaid interest thereon, if any, to, but not including, the redemption date.
Teva Finance III may redeem the USD Notes, in whole or in part, at any time or from time to time, upon at least 10 days’, but not more than 60 days’, prior notice. The USD Notes will be redeemable at a redemption price equal to the greater of (1) 100% of the principal amount of the USD Notes to be redeemed or (2) the sum of the present values of the Remaining Scheduled Payments (as defined in the USD Notes Indenture) of the USD Notes of such series being redeemed discounted, on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months), using a discount rate equal to the sum of the Treasury Rate (as defined in the USD Notes Indenture) plus 50 basis points, plus accrued and unpaid interest thereon, if any (including Additional Interest, if any), to, but not including, the redemption date; provided that if Teva Finance III elects to redeem the USD Notes at any time on or after October 31, 2024 (three months prior to the maturity date of the USD Notes), Teva Finance III may redeem the USD Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the USD Notes then outstanding to be redeemed, plus accrued and unpaid interest thereon, if any, to, but not including, the redemption date.
The terms of the Indentures, among other things and subject to specified exceptions, limit the ability of (a) the Company and its subsidiaries to (i) create liens upon certain of their property and (ii) enter into sale-leaseback transactions; and (b) the applicable Issuer and the Company to merge, consolidate or sell, lease or convey all or substantially all of their assets. The Indentures provide for customary events of default, which include (subject in certain cases to customary grace and cure periods), among others, nonpayment of principal or interest; breach of other covenants or agreements in the Indentures; acceleration of certain other indebtedness; failure of the Company’s guarantee to be enforceable; and certain events of bankruptcy or insolvency. The Notes were issued in private offerings exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), to qualified institutional buyers in accordance with Rule 144A and to non-U.S. persons in offshore transactions in reliance on Regulation S under the Securities Act.
In connection with the sale of the Euro Notes, Teva Finance II and the Company entered into a Registration Rights Agreement, dated as of November 25, 2019, with the initial purchasers party thereto. In connection with the sale of the USD Notes, Teva Finance III and the Company entered into a Registration Rights Agreement, dated as of November 25, 2019, with the initial purchasers party thereto. Under the terms of each Registration Rights Agreements, the applicable Issuer and the Company agreed to use reasonable best efforts to file a registration statement with respect to a registered exchange offer to exchange the Notes for new notes with terms substantially identical to the Notes, to cause the exchange offer registration statement to be declared effective by the Securities and Exchange Commission and to consummate the exchange offer on or before the 365th day after November 25, 2019. The Issuers and the Company may be required to provide shelf registration statements to cover resale of any series of Notes under certain circumstances. If the Issuers and the Company fail to satisfy these and other obligations contained in the Registration Rights Agreements, additional payments of interest will accrue on the Notes.
The foregoing summary descriptions of the Euro Notes Base Indenture, Euro Notes Supplemental Indenture, USD Notes Base Indenture, USD Notes Supplemental Indenture, each series of Notes and the Registration Rights Agreements are not complete and are qualified in their entirety by reference to the Euro Notes Base Indenture, the Euro Notes Supplemental Indenture, the form of Euro Notes, the Euro Notes Registration Rights Agreement, the USD Notes Base Indenture, the USD Notes Supplemental Indenture, the form of USD Notes and the USD Notes Registration Rights Agreement, which are filed as Exhibits 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7 and 4.8, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.