Item 1.01
|
Entry into a Material Definitive Agreement.
|
On April 20, 2016, Lowes
Companies, Inc. (the Company) issued an aggregate of $3.3 billion of unsecured notes, consisting of $250 million aggregate principal amount of its Floating Rate Notes due April 15, 2019 (the Floating Rate Notes), $350
million aggregate principal amount of its 1.15% Notes due April 15, 2019 (the 2019 Fixed Rate Notes), $1.35 billion aggregate principal amount of its 2.50% Notes due April 15, 2026 (the 2026 Fixed Rate Notes), and
$1.35 billion aggregate principal amount of its 3.70% Notes due April 15, 2046 (the 2046 Fixed Rate Notes and, together with the 2019 Fixed Rate Notes and the 2026 Fixed Rate Notes, the Fixed Rate Notes). The Floating
Rate Notes and the Fixed Rate Notes are collectively referred to herein as the Notes. The Company received net proceeds, after expenses, of approximately $3.26 billion from the issuance of the Notes.
The Notes are governed by and were issued pursuant to the terms of an Amended and Restated Indenture, dated as of December 1, 1995 (the
Base Indenture), between the Company and U.S. Bank National Association, as successor trustee (the Trustee), as supplemented by a Thirteenth Supplemental Indenture, dated as of April 20, 2016, between the Company and the
Trustee (the Thirteenth Supplemental Indenture and, together with the Base Indenture, the Indenture).
The Notes
are unsecured obligations and rank equally with the Companys existing and future unsecured senior indebtedness. The Indenture contains covenants restricting the issuance of debt by the Companys subsidiaries but does not restrict the
Company from incurring additional indebtedness. Each series of the Notes is a new issue of securities with no established trading market. The Company does not intend to apply for the listing of any series of the Notes on any securities exchange or
for quotation of such Notes on any automated dealer quotation system.
The Floating Rate Notes will mature on April 15, 2019, unless
earlier repurchased by the Company, and will bear interest at a variable rate, reset each interest period, equal to the three-month LIBOR for U.S. dollar deposits plus 0.24%. The Company will pay interest on the Floating Rate Notes quarterly in
arrears on each April 15, July 15, October 15 and January 15, commencing July 15, 2016. Interest will be computed on the basis of the actual number of days elapsed in each interest period and a 360-day year.
Payments of principal and interest to owners of book-entry interests will be made in accordance with the procedures of The Depository Trust Company and its participants in effect from time to time. The Company does not have the right to optionally
redeem the Floating Rate Notes prior to maturity.
The 2019 Fixed Rate Notes will mature on April 15, 2019, the 2026 Fixed Rate Notes
will mature on April 15, 2026, and the 2046 Fixed Rate Notes will mature on April 15, 2046, in each case, unless earlier redeemed or repurchased by the Company. The 2019 Fixed Rate Notes will bear interest at a rate of 1.15% per
annum, the 2026 Fixed Rate Notes will bear interest at a rate of 2.50% per annum and the 2046 Fixed Rate Notes will bear interest at a rate of 3.70% per annum. The Company will pay interest on the Fixed Rate Notes semiannually in arrears
on each April 15 and October 15, commencing October 15, 2016. Interest will be computed on the basis of a 360-day year composed of twelve 30-day months. Payments of principal and interest to owners of book-entry interests will be made
in accordance with the procedures of The Depository Trust Company and its participants in effect from time to time.
At any time prior to
their maturity date (with respect to the 2019 Fixed Rate Notes) and prior to the date that is three months (with respect to the 2026 Fixed Rate Notes) or six months (with respect to the 2046 Fixed Rate Notes) prior to the applicable maturity date
for such series of Fixed Rate Notes, the Fixed Rate Notes of each series will be redeemable, in whole at any time or in part from time to time, at the Companys option, at a redemption price, to be calculated by the Company, equal to the
greater of (i) 100% of the principal amount of the Fixed Rate Notes to be redeemed or (ii) the sum of the present values of the remaining scheduled payments of principal and interest on such Fixed Rate Notes that but for the redemption
would be due after the related redemption date through the applicable par call date with respect to the series of Fixed Rate Notes being redeemed, assuming the notes matured on the first par call date (not including any portion of such payments of
interest accrued as of the date of redemption), discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined in the Thirteenth Supplemental Indenture), plus
5 basis points with respect to the 2019 Fixed Rate Notes, 15 basis points with respect to the 2026 Fixed Rate Notes, and 20 basis points with respect to the 2046 Fixed Rate Notes; plus, in each case, accrued and unpaid interest thereon to, but
excluding, the date of redemption.
On or after the date that is three months (with respect to the 2026 Fixed Rate Notes) or six months
(with respect to the 2046 Fixed Rate Notes) prior to the applicable maturity date for such series of Fixed Rate Notes, the 2026 Fixed Rate Notes and the 2046 Fixed Rate Notes will be redeemable, in whole at any time or in part from time to time, at
the Companys option, at par plus accrued and unpaid interest thereon to, but excluding, the date of redemption.
In addition, upon a
Change of Control Triggering Event (as defined in the Thirteenth Supplemental Indenture), the holders of the Notes may require the Company to repurchase all or any part of their Notes at a purchase price of 101% of the principal amount, plus accrued
and unpaid interest, if any, on such Notes to the date of purchase (unless, with respect to the Fixed Rate Notes, the Company has exercised its right to redeem all of the Fixed Rate Notes).
The Trustee and/or its affiliates have engaged in, and may in the future engage in, commercial
dealings in the ordinary course of business with the Company or its affiliates, including investment banking services and acting as lenders under various loan facilities. In particular, the Trustee is a participant in the Companys senior
credit facility described in the Companys filings with the Commission. The Trustee and/or its affiliates have received, or may in the future receive, customary fees and commissions or other payments for these transactions.
The foregoing summaries of documents described above do not purport to be complete and are qualified in their entirety by reference to the
full text of such documents, which are filed as exhibits hereto or otherwise on file with the Securities and Exchange Commission.