Item 1.01 Entry into a Material Definitive Agreement
On May 16, 2022, NXP B.V., NXP Funding LLC, NXP USA, Inc. (the "Issuers") and
NXP Semiconductors N.V. (the "Company") completed an underwritten public
offering of $500,000,000 aggregate principal amount of 4.400% Senior Notes due
2027 (the "2027 Notes") and $1,000,000,000 aggregate principal amount of 5.000%
Senior Notes due 2033 (the "2033 Notes" and, together with the 2027 Notes, the
"Notes"). The Notes were offered and sold pursuant to the Issuers' and the
Company's automatic shelf registration statement on Form S-3ASR (Registration
No. 333-263733), which was filed with the Securities and Exchange Commission
(the "SEC") and became effective on March 21, 2022. In connection with the
offering of the Notes, the Issuers and the Company entered into an underwriting
agreement (the "Underwriting Agreement"), dated May 12, 2022, with Citigroup
Global Markets Inc., Deutsche Bank Securities, Inc. and Goldman Sachs & Co. LLC,
as representatives of the several underwriters named therein.
The Company and the Issuers intend to use the net proceeds from the offering of
the 2027 Notes, together with all or a portion of the net proceeds of the 2033
Notes to redeem the $900 million aggregate principal amount of outstanding
dollar-denominated 4.625% senior unsecured notes due 2023 (the "4.625% 2023
Notes") in accordance with the terms of the indenture governing such notes (the
"4.625% 2023 Notes Redemption"), including all premiums, accrued interest and
costs and expenses related to the 4.625% 2023 Notes Redemption. Any remaining
net proceeds of the 2027 Notes will be temporarily held as cash and other short
term securities or used for general corporate purposes, which may include
capital expenditures or short-term debt repayment. The Issuers intend to
allocate an amount equal to the net proceeds of the offering of the 2033 Notes
to the financing of, in whole or in part, one or more eligible green projects,
which are defined as investments in (A) research and development for the
Company's (i) "green chip" resonant solutions, (ii) battery control and energy
management for electric and hybrid cars, (iii) Advanced Driver Assistance
Systems, (iv) mobile device "beam steering", (v) edge processing portfolio and
(vi) smart building technologies, and (B) energy efficiency measures at the
Company's manufacturing and non-manufacturing facilities. Pending the allocation
of an amount equal to the net proceeds of the 2033 Notes toward eligible green
projects, we expect to temporarily use all or a portion of the net proceeds from
the offering of the 2033 Notes to help fund the redemption of the 4.625% 2023
Notes.
The Notes were issued pursuant to an indenture, dated as of May 16, 2022, among
the Issuers, the Company, as guarantor and Deutsche Bank Trust Company Americas,
as trustee (the "Trustee") (the "Base Indenture"), as supplemented by the first
supplemental indenture, dated as of May 16, 2022, among the Issuers, the
Company, as guarantor and the Trustee (the "First Supplemental Indenture", and
together with the Base Indenture, the "Indenture"). Interest is payable on the
2027 Notes semi-annually in arrears at an annual rate of 4.400% on June 1 and
December 1 of each year, beginning on December 1, 2022. The 2027 Notes will
mature on June 1, 2027. Interest is payable on the 2033 Notes semi-annually in
arrears at an annual rate of 5.000% on January 15 and July 15 of each year,
beginning on January 15, 2023. The 2033 Notes will mature on January 15, 2033.
At any time prior to (i) May 1, 2027 (the date one month prior to the maturity
date of the 2027 Notes) for the 2027 Notes and (ii) October 15, 2032 (the date
three months prior to the maturity date of the 2033 Notes) for the 2033 Notes
(collectively, the "Par Call Dates"), the Issuers may redeem the applicable
series of Notes, in whole or in part, at a price equal to the greater of (i)
100% of the principal amount of the Notes to be redeemed and (ii) the sum of the
present values of the remaining scheduled payments of principal and interest to
the applicable Par Call Date discounted to the applicable date of redemption
(assuming the Notes 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
Treasury Rate, plus 25 basis points in case of the 2027 Notes and 35 basis
points in case of the 2033 Notes, plus, in either case, any accrued and unpaid
interest thereon. The Issuers may redeem a series of Notes, in whole or in part,
at any time and from time
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to time, on or after the applicable Par Call Date for such series of Notes at a
redemption price equal to 100% of the principal amount of the Notes being
redeemed plus accrued and unpaid interest, if any, to, but excluding, the date
of redemption.
If the Issuers experience specific kinds of changes of control, they will be
required to offer to purchase each series of the Notes at a purchase price equal
to 101% of the principal amount, plus accrued and unpaid interest.
The Notes will be senior unsecured obligations of the Issuers and will be
guaranteed by the Company on a senior unsecured basis (the "Guarantee"). The
Notes and the Guarantee will rank equal in right of payment with all of the
Issuers' and Company's existing and future senior unsecured indebtedness, but
will be effectively junior to all of the Issuers' and the Company's future
secured indebtedness to the extent of the value of the assets securing such
indebtedness and effectively junior in certain circumstances to indebtedness
incurred under NXP B.V. and NXP Funding LLC's Revolving Credit Facility with
respect to certain assets of NXP B.V. and its subsidiaries in the event that
such assets may secure such indebtedness in the future. The Notes and the
Guarantee will rank senior in right of payment to the Issuers' and the Company's
existing and future subordinated indebtedness and will be structurally
subordinated to all of the liabilities, including trade payables, of their
subsidiaries.
The Indenture provides for customary events of default, including failure to
make required payments; failure to comply with certain agreements or covenants;
failure to pay, or acceleration of, certain other material indebtedness; certain
events of bankruptcy and insolvency; and failure to pay certain judgments. An
event of default under the Indenture will allow either the Trustee or the
holders of at least 30% in principal amount of the then outstanding Notes to
accelerate the amounts due under the Notes.
The foregoing descriptions of the Indenture and the Underwriting Agreement do
not purport to be complete statements of the parties' rights and obligations
under these agreements and are qualified in their entirety by reference to the
full text of the Indenture and the Underwriting Agreement, respectively. The
Indenture, the forms of global notes for the offering and the Underwriting
Agreement are filed as exhibits to this Form 8-K and are incorporated herein by
reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
The information set forth in Item 1.01 of this Current Report on Form 8-K is
incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits
The following exhibits are attached with this current report on Form 8-K:
(d) Exhibits.
1.1 Underwriting Agreement, dated as of May 12, 2022, among the Issuers, the
Company and Citigroup Global Markets Inc., Deutsche Bank Securities Inc.
and Goldman Sachs & Co. LLC, as representatives of the underwriters named
therein.
4.1 Base Indenture, dated as of May 16, 2022, among the Issuers, the Company
and the Trustee.
4.2 First Supplemental Indenture, dated as of May 16, 2022, among the
Issuers, the Company and the Trustee.
4.3 Form of Note for 4.400% Senior Notes due 2027, included as part of
Exhibit 4.2 hereto.
4.4 Form of Note for 5.000% Senior Notes due 2033, included as part of
Exhibit 4.2 hereto.
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP.
5.2 Opinion of De Brauw Blackstone Westbroek N.V.
23.1 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit
5.1).
23.2 Consent of De Brauw Blackstone Westbroek N.V. (included in Exhibit 5.2).
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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