Offering
On April 13, 2020, McCormick & Company, Incorporated, a Maryland corporation (the “Company”), entered into an underwriting agreement (the “Underwriting Agreement”) with BofA Securities, Inc., SunTrust Robinson Humphrey, Inc. and Wells Fargo Securities, LLC, as representatives of the several underwriters named in Schedule A thereto (the “Underwriters”), for the issuance and sale of $500 million aggregate principal amount of its 2.500% Notes due 2030 (the “Notes”). The Notes have been registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the Company’s Registration Statement on Form S-3 (No. 333-237649) previously filed with the Securities and Exchange Commission (the “Commission”). The offering of the Notes (the “Offering”) closed on April 16, 2020. The Company intends to use the net proceeds from the Offering for general corporate purposes.
The Underwriting Agreement contains customary representations, warranties and agreements by the Company and customary conditions to closing, indemnification obligations of the Company and the Underwriters, including for liabilities under the Securities Act, other obligations of the parties and termination provisions.
The foregoing description of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by reference to the Underwriting Agreement which is filed as Exhibit 1.1 to this report and incorporated by reference herein.
Indenture and Notes
The Notes were issued pursuant to an Indenture, dated as of July 8, 2011 (the “Indenture”), between the Company and U.S. Bank National Association, as trustee (the “Trustee”), pursuant to which the Company may issue an unlimited amount of debt securities from time to time in one or more series.
The Notes bear interest at a rate of 2.500% per annum and mature on April 15, 2030. Interest on the Notes will be paid semi-annually in arrears on April 15 and October 15 of each year, beginning on October 15, 2020. The Company may redeem the Notes, in whole or in part, at any time or from time to time prior to their maturity at the redemption price described in the Notes. Additionally, upon the occurrence of a change of control, as defined in the Notes, the Company will be required to make an offer to purchase the Notes at a price equal to 101% of their principal amount, plus accrued and unpaid interest to the date of repurchase.
The Indenture provides, among other things, that the Notes will be unsecured senior obligations of the Company and will rank equally with all of the Company’s other unsecured and unsubordinated indebtedness from time to time outstanding.
The Indenture imposes certain limitations on the ability of the Company and its restricted subsidiaries, as defined in the Indenture, to create or incur liens and to enter into sale and leaseback transactions. The Indenture also imposes certain limitations on the ability of the Company to merge or consolidate with or into any other person or sell, transfer, assign, lease, convey or otherwise dispose of all or substantially all of the property of the Company in any one transaction or series of related transactions.
The Indenture provides 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 covenants or other agreements in the Indenture, defaults in or failure to pay certain other indebtedness, and certain events of bankruptcy or insolvency.
U.S. Bancorp Investments, Inc., one of the Underwriters, is an affiliate of the Trustee.
The foregoing description of the Indenture and the Notes does not purport to be complete and is qualified in its entirety by reference to the Indenture and the form of global note representing the Notes, which are included as Exhibits 4.1 and 4.2, respectively, to this report and incorporated by reference herein.
