Summary
The following is a summary of the more detailed information appearing elsewhere or incorporated by reference in this
prospectus supplement. It does not contain all of the information that may be important to you. You should read this prospectus supplement in its entirety and the documents we have referred you to,
including those incorporated herein by reference, especially the risks of investing in the notes discussed under "Risk factors," before investing in these notes. Except as otherwise indicated or
unless the context otherwise requires, "Wyndham Worldwide," "we," "us," "our," "the Company," and "our company" refer to Wyndham Worldwide Corporation or any successor thereto and its subsidiaries on
a consolidated basis. Unless otherwise indicated, information is presented as of December 31, 2016.
Our company
We are one of the world's largest hospitality companies, offering travelers a wide range of hospitality services and products through our
global portfolio of world-renowned brands. The hospitality industry is a major component of the travel industry, which is one of the largest retail industry segments of the global economy. Our
portfolio of brands have a significant presence in many major hospitality markets in the United States and throughout the world and are uniquely positioned to provide travelers access to a large
assortment of travel accommodations and destinations. Our brands include: Wyndham Hotels and Resorts, Ramada, Days Inn, Super 8, Howard Johnson, Wingate by Wyndham, Microtel Inns & Suites by
Wyndham, TRYP by Wyndham, Dolce Hotels and Resorts, RCI, Landal GreenParks, Novasol, Hoseasons, cottages.com, James Villa Holidays, Wyndham Vacation Rentals, Wyndham Vacation Resorts, Shell Vacations
Club and WorldMark by Wyndham. Our operations are grouped into three segments: hotel group, destination network and vacation ownership.
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Wyndham Hotel Group
is the world's largest hotel company based on the number of properties,
with 8,035 hotels and over 697,600 hotel rooms worldwide. We franchise in the upscale, upper midscale, midscale, economy and extended stay segments with a concentration in economy brands. We also
provide property management services for full-service and select limited-service hotels. This is predominantly a fee-for-service business that produces recurring revenue streams with steady cash flow
and low capital investment requirements.
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Wyndham Destination Network
is the world's largest provider of professionally managed, unique
vacation accommodations based on the number of accommodations. We have the world's largest vacation exchange network with 3.8 million members. Our overall network has over 121,000 vacation
accommodations, located in over 110 countries and territories and includes cottages, villas, chalets, vacation ownership condominiums, fractional resorts, second homes, yachts, private residence
clubs, traditional hotel rooms and city apartments. This is primarily a fee-for-service business that provides stable revenue streams and produces strong cash flow.
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Wyndham Vacation Ownership
is the world's largest timeshare (also known as vacation ownership)
business based on the number of resorts, units, owners and revenues, with 219 resorts and over 887,000 owners. We develop and market Vacation Ownership Interests
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("VOIs")
to individual consumers, provide consumer financing in connection with the sale of VOIs and provide property management services at resorts.
Our
business segments generate a diversified revenue stream and high free cash flow. For the year ended December 31, 2016, approximately 63% of our revenues were generated from our
fee-for-service businesses. We derive our revenues from (i) franchise fees received from hotels for use of our brand names and providing marketing and reservation activities,
(ii) providing property management services to hotels and vacation ownership resorts, (iii) providing vacation exchange and rentals services and (iv) providing services under our
Wyndham Asset Affiliation Models in our timeshare business. The remainder of our revenue comes primarily from the sale of VOIs and related financing.
Our
mission is to increase shareholder value by offering the widest ranges of places to stay thereby allowing customers to experience travel the way they want. Our collective brands provide travelers
with more than 129,000 places to stay in over 110 countries and territories on six continents. Our strategies to achieve these objectives are to:
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strategically allocate capital to expand our fee-for-service business models;
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increase cash flow and profitability through superior execution;
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develop innovative services and products to meet the evolving needs of customers; and
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further develop our world class capabilities by strengthening our brands, attracting and developing the best talent and investing in
technology.
We
provide value-added services and products and also support and promote green and diversity initiatives to enhance the travel experience of the individual consumer and to drive revenues to our
business customers.
All
of our businesses have both domestic and international operations. During 2016, we derived 76% of our revenues in the U.S. and 24% internationally (approximately 13% in Europe and 11% in all other
international regions). For a discussion of our segment revenues, profits, assets and geographical operations, see Note 21 to the Consolidated Financial Statements included in our Annual Report
on Form 10-K for the period ended December 31, 2016, which is incorporated by reference herein.
Recent developments
On March 14, 2017, we priced a securitization transaction involving the issuance by Sierra Timeshare 2017-1 Receivables
Funding LLC, an indirect non-recourse subsidiary of Wyndham Vacation Ownership, of $276,100,000 2.91% Class A Notes and $73,900,000 3.20% Class B Notes backed by vacation
ownership receivables. The offering is expected to close on March 22, 2017. The indebtedness will constitute non-recourse debt that is securitized through bankruptcy-remote special purpose
entities, the creditors of which have no recourse to us for principal and interest.
Risk factors
See the sections entitled "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2016 and in this
prospectus supplement and the accompanying prospectus for a discussion of the factors you should consider carefully before deciding to invest in the notes.
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The offering
The summary below describes the principal terms of the notes. Certain of the terms and conditions described below are subject to important
limitations and exceptions. For a more detailed description of the terms and conditions of the notes, see the section entitled "Description of notes."
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Issuer
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Wyndham Worldwide Corporation, a Delaware corporation.
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Securities Offered
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$300 million aggregate principal amount of 4.150% notes due 2024 and $400 million aggregate principal amount of 4.500% notes due 2027.
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Maturity
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The 2024 Notes will mature on April 1, 2024 and the 2027 Notes will mature on April 1, 2027.
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Interest Rate
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Subject to "Interest Rate Adjustment" below, the 2024 Notes will bear interest at the rate of 4.150% per year and the 2027 Notes will bear interest at the rate of 4.500% per year. Interest on the
notes will be payable semi-annually in arrears on April 1 and October 1 of each year commencing October 1, 2017.
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Interest Rate Adjustment
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The interest rate payable on the notes will be subject to adjustments from time to time if either Moody's or S&P (or a substitute rating agency therefor) downgrades (or downgrades and subsequently
upgrades) the credit rating assigned to the notes. See "Description of notesInterest Rate Adjustment."
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Ranking
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The notes will be our general unsecured obligations and will rank equally with all of our existing and future unsubordinated obligations. As of December 31, 2016, we had $3,208 million of
unsecured indebtedness outstanding, $163 million of secured indebtedness outstanding, and $2,141 million of securitized indebtedness outstanding.
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Holders of any secured indebtedness will have claims that are prior to your claims as holders of the notes, to the extent of the value of the assets securing such indebtedness, in the event of any
bankruptcy, liquidation or similar proceeding.
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The notes will be structurally subordinated to all obligations of our subsidiaries, including claims with respect to trade payables. As of December 31, 2016, our direct and indirect subsidiaries had
$163 million of outstanding indebtedness and other liabilities (excluding intercompany liabilities and indebtedness under our securitization programs), which primarily relate to capital leases, all of which are structurally senior to the
notes.
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Further Issues
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We may create and issue further notes ranking equally and ratably in all respects with either series of notes being offered hereby (except for the issue date, issue price, and, if applicable, the
initial interest payment date), so that such further notes will be consolidated and form a single series with the relevant series of notes being offered hereby and will have the same terms. Please see the section entitled "Description of
notesFurther issues."
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Optional Redemption
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We may redeem at our option all or a portion of (i) the 2024 Notes at any time prior to February 1, 2024 (two months prior to the maturity date of the 2024 Notes) and (ii) the 2027
Notes at any time prior to January 1, 2027 (three months prior to the maturity date of the 2027 Notes) at the "make-whole" redemption price described under the section entitled "Description of notesOptional redemption" in this
prospectus supplement plus, in each case, accrued and unpaid interest on the principal amount being redeemed to, but not including, the redemption date.
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We may redeem at our option all or a portion of (i) the 2024 Notes at any time on or after February 1, 2024 (two months prior to the maturity date of the 2024 Notes) and (ii) the
2027 Notes at any time on or after January 1, 2027 (three months prior to the maturity date of the 2027 Notes), in each case at a redemption price equal to 100% of the principal amount of the notes being redeemed, plus, accrued and unpaid
interest on the principal amount being redeemed to, but not including, the redemption date.
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Certain Covenants
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We will issue the notes under an indenture that will, among other things, limit our ability to:
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consolidate, merge or
sell all or substantially all of our assets;
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create liens, except for
those created in our securitization facilities; and
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enter into sale and
leaseback transactions.
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All of these limitations will be subject to a number of important qualifications and exceptions. Please see the section entitled "Description of notes."
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Repurchase at the Option of the Holders of Notes
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If we experience specific kinds of change of control and a related downgrade on a series of the notes to below investment grade ratings on any date within a specified period of time following a change
of control or public notice of an arrangement that could result in a change of control, we will be required to offer to purchase the notes of such series at a price equal to 101% of their principal amount plus accrued and unpaid interest, if any, to,
but excluding, the date of purchase. Please see the section entitled "Description of notesRepurchase at the option of the holders of notes."
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Use of Proceeds
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We intend to use the net proceeds of this offering for general corporate purposes, which may include working capital, capital expenditures, acquisitions, stock repurchases or repayment of outstanding
commercial paper or other borrowings. Pending these uses, we intend to invest net proceeds in interest-bearing, short-term investments. Please see the section entitled "Use of proceeds."
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Book-entry Form
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The notes will be issued in the form of one or more fully registered global notes, which will be deposited with, or on behalf of, The Depository Trust Company (the "Depositary"), New York, New York and
registered in the name of Cede & Co., the Depositary's nominee. Beneficial interests in the global notes will be represented through book-entry accounts of financial institutions acting on behalf of beneficial owners as direct and
indirect participants in the Depositary. Investors may elect to hold interests in the global notes through either the Depositary (in the United States), or Clearstream Banking Luxembourg S.A. or Euroclear Bank S.A./N.V. as operator of the
Euroclear System (in Europe), if they are participants in those systems, or indirectly through organizations that are participants in those systems.
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Absence of a public market for the notes
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Each series of notes is a new issue of securities for which there is currently no established market. Accordingly, we cannot assure you as to the development or liquidity of any market for the notes. The
underwriters have advised us that they currently intend to make a market in the notes. However, they are not obligated to do so, and they may discontinue any market making activities with respect to the notes without notice to you or us. We do not
intend to apply for a listing of the notes on any securities exchange or quotation system.
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Material United States federal income tax considerations
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For a discussion of material United States federal income tax consequences related to the ownership and disposition of the notes, see "Material United States federal income tax
considerations."
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Trustee and paying agent
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U.S. Bank National Association.
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Governing Law
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The notes and the indenture under which they will be issued will be governed by New York law.
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Risk factors
Your investment in the notes involves certain risks. Before you invest in the notes, in consultation with your own financial and legal
advisers, you should carefully consider, among other matters, the following discussion of risks relating to the notes and the discussion of risks relating to our business under the caption "Risk
factors" in the accompanying prospectus and under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2016, which are incorporated herein by
reference. These risk factors may be amended, supplemented or superseded from time to time by risk factors contained in other Exchange Act reports that we file with the SEC, which will be incorporated
herein by reference, or by a post-effective amendment to the registration statement of which this prospectus supplement forms a part. In addition, new risks may emerge at any time and we
cannot predict such risks or estimate the extent to which they may affect our financial performance.
Risks related to the notes
Our level of indebtedness could limit cash flow available for our operations and could adversely affect our
ability to service our debt or obtain additional financing, if necessary.
As of December 31, 2016, our total debt outstanding, exclusive of debt outstanding under our vacation ownership securitization program, was
$3,371 million. Our level of indebtedness could restrict our operations and make it more difficult for us to satisfy our obligations under the notes. For example, our level of indebtedness
could, among other things:
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affect our liquidity by limiting our ability to obtain additional financing for working capital, or limit our ability to obtain financing for
capital expenditures and acquisitions or make any available financing more costly;
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require us to dedicate all or a substantial portion of our cash flow to service our debt, which would reduce funds available for other business
purposes, such as capital expenditures, dividends or acquisitions;
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limit our flexibility in planning for or reacting to changes in the markets in which we compete;
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place us at a competitive disadvantage relative to our competitors with less indebtedness;
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render us more vulnerable to general adverse economic and industry conditions; and
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make it more difficult for us to satisfy our financial obligations, including those relating to the notes.
In
addition, the indenture governing the notes, our existing senior credit facilities and the terms of the agreements governing our other outstanding indebtedness contain or will contain financial and
other restrictive covenants that will limit our ability to engage in activities that may be in our long-term best interests. Our failure to comply with those covenants could result in an event of
default which, if not cured or waived, could result in the acceleration of all of our debt, including the notes.
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Despite current indebtedness levels, we and certain of our subsidiaries may incur substantially more debt.
This could further exacerbate the risks associated with our leverage.
The terms of the indenture that will govern the notes will not prohibit us or our subsidiaries from incurring additional indebtedness. If new debt is added to
our and our subsidiaries' current debt levels, the related risks that we and they now face could intensify.
The notes will be unsecured and rank behind any secured creditors to the extent of the value of the
collateral securing their claims.
As of December 31, 2016, we had $163 million of secured indebtedness. Holders of any secured indebtedness will have claims that are prior to
your claims as holders of the notes to the extent of the value of the assets securing such indebtedness. In the event of any distribution or payment of our assets in any foreclosure, dissolution,
winding-up, liquidation, reorganization or other bankruptcy proceeding, holders of our secured indebtedness will have prior claim to our assets that constitute their collateral. Holders of the notes
will participate ratably with all holders of our unsecured indebtedness that is deemed to be of the same class as the notes. In that event, because the notes will not be secured by any of our assets,
it is possible that our remaining assets might be insufficient to satisfy your claims in full.
The notes will be structurally junior to the indebtedness and other liabilities of our subsidiaries.
You will not have any claim as a creditor against our subsidiaries and all existing and future indebtedness and other liabilities, including trade payables,
whether secured or unsecured, of those subsidiaries will be structurally senior to the notes. Furthermore, in the event of any bankruptcy, liquidation or reorganization of any of our subsidiaries, the
rights of the holders of notes to participate in the assets of such subsidiary will rank behind the claims of that subsidiary's creditors, including trade creditors (except to the extent we have a
claim as a creditor of such subsidiary). As a result, the notes are structurally subordinated to the outstanding and other liabilities, including trade payables, of our subsidiaries. As of
December 31, 2016, our subsidiaries had $163 million of outstanding indebtedness and other liabilities (excluding intercompany liabilities and indebtedness under our securitization
programs), which primarily relate to capital leases, all of which are structurally senior to the notes.
In
addition, the indenture permits our subsidiaries to incur additional indebtedness which would be structurally senior to the notes and does not contain any limitation on the amount of other
liabilities, such as trade payables, that may be incurred by our subsidiaries.
Our ability to service our debt and meet our cash requirements depends on many factors, some of which are
beyond our control.
Our ability to satisfy our obligations will depend on our future operating performance and financial results, which will be subject, in part, to factors
beyond our control, including interest rates and general economic, financial and business conditions. If we are unable to generate sufficient cash flow to service our debt, we may be required
to:
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refinance all or a portion of our debt, including the notes;
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obtain additional financing;
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sell some of our assets or operations;
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reduce or delay capital expenditures and/or acquisitions; or
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revise or delay our strategic plans.
If
we are required to take any of these actions, it could have a material adverse effect on our business, financial condition and results of operations. In addition, we cannot assure you that we would
be able to take any of these actions, that these actions would enable us to continue to satisfy our capital requirements or that these actions would be permitted under the terms of our various debt
instruments, including our senior credit facilities and the indenture.
Our failure to meet the terms of covenants in our existing senior credit facilities may result in an event of
default.
Our existing senior credit facilities contain covenants customary for credit facilities of this nature, including requiring us to meet specified financial
ratios and financial tests. Our ability to borrow under our senior credit facilities will depend upon satisfaction of these covenants. Events beyond our control can affect our ability to meet those
covenants.
The
financial ratio covenants under our credit facilities consist of a minimum consolidated interest coverage ratio of at least 2.5 times consolidated EBITDA to consolidated interest expense for the
measurement period and a maximum consolidated leverage ratio not to exceed 4.25 times consolidated total indebtedness to consolidated EBITDA on the measurement date (provided that the consolidated
leverage ratio may be increased for a limited period to 5.0 times in connection with a material acquisition). As of December 31, 2016, our consolidated interest coverage ratio was 10.5 times
and our consolidated leverage ratio was 2.4 times. Negative covenants under the credit facilities include limitations on indebtedness of material subsidiaries; liens; mergers, consolidations,
liquidations and dissolutions; and sales of all or substantially all of our assets.
If
we are unable to meet the terms of our financial covenants, or if we break any of these covenants, a default could occur under one or more of these agreements. A default, if not waived by our
lenders, could result in the acceleration of our outstanding indebtedness and cause our debt to become immediately due and payable. If acceleration occurs, we would not be able to repay our debt and
it is unlikely that we would be able to borrow sufficient funds to refinance our debt. Even if new financing is offered to us, it may not be on terms acceptable to us.
The IRS could take the position that the contingent payment debt instrument rules apply to the notes.
Although we intend to take the position that the contingent payment debt instrument rules do not apply to the notes, it is possible that the Internal Revenue
Service ("IRS") could successfully assert that the notes should instead be taxed under those rules as a result of the Interest Rate Adjustment, Change of Control Offer or otherwise. If the notes were
treated as "contingent payment debt instruments," then regardless of your method of tax accounting, you would be required to accrue interest income at a higher rate than the stated interest rate on
the notes, and to treat any gain realized on the taxable disposition of a note as ordinary interest income, rather than capital gains. See "Material United States federal income tax considerations."
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A downgrade by Moody's or S&P could restrict our access to the capital markets and increase our borrowing
costs.
A downgrade by Moody's and/or S&P could affect our future borrowing and/or bonding costs and the availability of such bonding capacity. It is also possible
that asset-backed securities issued pursuant to our securitization programs could in the future be downgraded by rating agencies. If our asset-backed securities are downgraded, our ability to complete
other securitization transactions on acceptable terms could be jeopardized, and we could be forced to rely on other funding sources which may be more expensive and less attractive, or such other
funding sources may not be available, which may require us to adjust our business operations accordingly, including reducing or suspending our financing to purchasers of VOIs. In addition, our
inability to access the securitization or debt markets or utilize other financing vehicles would negatively affect our liquidity. Please see the section entitled "Management's Discussion and Analysis
of Financial Condition and Results of OperationLiquidity" in our Annual Report on Form 10-K for the period ended December 31, 2016, which is incorporated herein by
reference.
We may choose to redeem the notes when prevailing interest rates are relatively low.
The notes are redeemable at our option and we may choose to redeem some or all of the notes from time to time, especially when prevailing interest rates are
lower than the rate borne by the notes. If prevailing rates are lower at the time of redemption, you would not be able to reinvest the redemption proceeds in a comparable security at an effective
interest rate as high as the interest rate on the notes being redeemed. Our redemption right also may adversely affect your ability to sell your notes as the optional redemption date or period
approaches. Please see the section entitled "Description of notesOptional redemption."
We may not be able to repurchase the notes upon a change of control.
Upon a change of control, as defined under the indenture governing the notes, and a related downgrade on a series of notes to below investment grade ratings
on any date within a specified period of time following the public notice of an arrangement that could result in a change of control, we are required to offer to repurchase all of the notes of such
series then outstanding at a price equal to 101% of the aggregate principal amount of the notes repurchased, plus accrued interest. In order to obtain sufficient funds to pay the purchase price of the
outstanding notes, we expect that we would have to refinance the notes. We may not under these circumstances be able to refinance the notes on reasonable terms, if at all. Our failure to offer to
purchase all outstanding notes or to purchase all validly tendered notes would be an event of default under the indenture governing the notes. Such an event of default may cause the acceleration of
our other indebtedness. Our future indebtedness may also contain restrictions on repayment requirements with respect to specified events or transactions that constitute a change of control under the
indenture. Please see the section entitled "Description of notesRepurchase at the option of the holders of notes."
We are a holding company and are dependent on dividends and other distributions from our subsidiaries.
Wyndham Worldwide is a holding company with limited direct operations. Our principal assets are the equity interests that we hold in our operating
subsidiaries. As a result, we are dependent on dividends and other distributions from our subsidiaries to generate the funds
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necessary
to meet our financial obligations, including the payment of principal and interest on our outstanding debt. Our subsidiaries are legally distinct from us and have no obligation to pay
amounts due on our debt or to make funds available to us for such payment.
An active trading market for the notes may not develop.
Prior to this offering, there has been no trading market for the notes. We do not intend to apply for listing of the notes on any securities exchange or to
arrange for quotation on any interdealer quotation system. We have been informed by the underwriters that they intend to make a market in the notes after the offering is completed. However, the
underwriters have no obligation to make a market in the notes and they may cease their market-making at any time without notice. In addition, the liquidity of the trading market in the notes, and the
market price quoted for the notes, may be adversely affected by changes in the overall market for this type of security and by changes in our financial performance or prospects or in the prospects for
companies in our industry generally. As a result, we cannot assure you that an active trading market will develop for the notes. If an active trading market does not develop or is not maintained, the
market price and liquidity of the notes may be adversely affected. In that case you may not be able to sell your notes at a particular time or you may not be able to sell your notes at a favorable
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Use of proceeds
We intend to use the net proceeds of this offering for general corporate purposes, which may include working capital, capital expenditures,
acquisitions, stock repurchases or repayment of outstanding commercial paper or other borrowings.
Pending
these uses, we intend to invest net proceeds in interest-bearing, short-term investments.
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Ratio of earnings to fixed charges
The following table sets forth our ratio of earnings to fixed charges for each of the periods indicated:
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Year ended December 31,
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2016
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2015
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2014
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2013
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2012
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Ratio of earnings to fixed charges
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4.94x
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5.00x
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4.88x
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3.82x
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3.49x
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The
ratio of earnings to fixed charges is computed by dividing (i) income before income taxes less income from equity investees, plus fixed charges, the amortization of capitalized interest,
and net (income)/loss attributable to non-controlling interest, less capitalized interest, by (ii) fixed charges. Our fixed charges consist of interest expense on all indebtedness (including
costs related to the amortization of deferred financing costs), capitalized interest and the portion of operating lease rental expense that is representative of the interest factor.
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Capitalization
The following table sets forth our cash and cash equivalents, securitized assets and capitalization as of December 31, 2016 on an
actual basis and as adjusted for this offering (assuming for this purpose that the proceeds of this offering are held as cash and cash equivalents on our balance sheet).
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As of December 31, 2016
(in millions)
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Actual
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As adjusted
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Cash and cash equivalents
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$
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185
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$
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883
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Securitized vacation ownership debt(1)
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$
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2,141
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$
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2,141
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Other debt(2):
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Revolving credit facility (due July 2020)(3)(4)
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$
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14
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$
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14
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Commercial paper(4)
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427
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427
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Term loan (due March 2021)
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323
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323
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$300 million 2.95% senior unsecured notes (due March 2017)
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300
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300
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$14 million 5.75% senior unsecured notes (due February 2018)
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14
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14
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$450 million 2.50% senior unsecured notes (due March 2018)
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449
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449
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$40 million 7.375% senior unsecured notes (due March 2020)
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40
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40
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$250 million 5.625% senior unsecured notes (due March 2021)
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248
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248
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$650 million 4.25% senior unsecured notes (due March 2022)(5)
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648
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648
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$400 million 3.90% senior unsecured notes (due March 2023)(6)
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407
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407
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$350 million 5.10% senior unsecured notes (due October 2025)(7)
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338
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338
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$300 million 4.150% senior unsecured notes (due April 2024) offered hereby
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299
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$400 million 4.500% senior unsecured notes (due April 2027) offered hereby
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399
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Capital leases
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143
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143
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Other
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20
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20
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|
|
|
|
|
Total other debt
|
|
|
3,371
|
|
|
4,069
|
|
|
|
|
|
|
|
Total debt
|
|
|
5,512
|
|
|
6,210
|
Total equity
|
|
|
718
|
|
|
718
|
|
|
|
|
|
|
|
Total capitalization
|
|
|
6,230
|
|
|
6,928
|
|
|
|
|
|
|
|
(1) Represents
non-recourse debt that is securitized through bankruptcy-remote special purpose entities, the creditors of which have no recourse to the Company for principal and interest.
These outstanding borrowings (which legally are not liabilities of the Company) are collateralized by $2,601 million of underlying gross vacation ownership contract receivables and related
assets (which legally are not assets of the Company) as of December 31, 2016. Does not include the notes we expect to issue on March 22, 2017 in an aggregate principal amount of approximately
$350 million securitized by vacation ownership receivables, as described under "SummaryRecent developments."
(2) The
carrying amounts of the senior unsecured notes are net of unamortized discounts of $11 million as of December 31, 2016. The carrying amounts of the senior unsecured
notes and term loan are net of debt issuance costs of $4 million as of December 31, 2016.
(3) The
revolving credit facility has a total borrowing capacity of $1.5 billion, which includes availability for letters of credit and commercial paper borrowings. After giving
effect to $427 million of outstanding commercial paper borrowings and $1 million of outstanding letters of credit, the total remaining borrowing capacity under the revolving credit
facility was $1,058 million as of December 31, 2016.
(4) During
the period from January 1, 2017 through February 28, 2017, we borrowed an additional $558 million under the revolving credit facility and in commercial
paper, a portion of which was used to repay our then outstanding $300 million 2.95% senior unsecured notes (due March 2017).
(5) Includes
$2 million of unamortized gains from the settlement of a derivative as of December 31, 2016.
(6) Includes
$9 million of unamortized gains from the settlement of a derivative as of December 31, 2016.
(7) Includes
$9 million of unamortized losses from the settlement of a derivative as of December 31, 2016.
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Description of notes
The 4.150% notes due 2024 (the "2024 notes") and the 4.500% notes due 2027 (the "2027 notes" and, collectively with the 2024 notes, the
"notes") offered hereby will be issued under an indenture, dated as of November 20, 2008 (the "Base Indenture"), between Wyndham Worldwide Corporation and U.S. Bank National Association, as
trustee (the "Trustee"), and a tenth supplemental indenture thereto, to be dated as of March 21, 2017 (the "Tenth Supplemental Indenture" and, together with the Base Indenture, the
"indenture"). In this Description of notes, "we," "us," "our," "the Company" and similar words refer to Wyndham Worldwide Corporation and not to any of its subsidiaries.
Because
this section is a summary, it does not describe every aspect of the notes and the indenture. This summary is subject to, and qualified in its entirety by reference to, all the provisions of
the notes and the indenture, including definitions of certain terms used therein. You may obtain copies of the notes and the indenture by requesting them from us or the Trustee.
General
Each series of notes:
-
-
will be our senior unsecured obligations;
-
-
will rank equally with all of our other senior unsecured indebtedness from time to time outstanding;
-
-
will be structurally subordinated to all existing and future obligations of our subsidiaries including claims with respect to trade payables;
-
-
will initially be limited to $300 million aggregate principal amount with respect to the 2024 notes and $400 million aggregate
principal amount with respect to the 2027 notes; and
-
-
will be issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.
Principal, maturity and interest
The 2024 notes will bear interest at the rate of 4.150% per year and the 2027 notes will bear interest at the rate of 4.500% per year. The interest rate
payable on the notes will be subject to adjustments from time to time if either Moody's or S&P (or a substitute rating agency therefor) downgrades (or downgrades and subsequently upgrades) the credit
rating assigned to the notes as described under "Interest Rate Adjustment." Interest will be payable semi-annually in arrears on April 1 and October 1 of each year,
beginning on October 1, 2017, and will be computed on the basis of a 360-day year of twelve 30-day months. Interest on the notes will accrue from and include the settlement date and will be
paid to holders of record on March 15 or September 15 immediately before the respective interest payment date.
The
2024 notes will mature on April 1, 2024 and the 2027 notes will mature on April 1, 2027. On the respective maturity date of each series of notes, the holders of such series of notes
will be entitled to receive 100% of the principal amount of such series of notes, subject to a
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Change
of Control as described under the section entitled "Description of notesRepurchase at the option of the holders of notes." The notes do not have the benefit of any sinking fund.
If
any interest payment date falls on a day that is not a business day, then payment of interest may be made on the next succeeding business day and no interest will accrue because of such delayed
payment. With respect to the notes, when we use the term "business day" we mean any day except a Saturday, a Sunday or a day on which banking institutions in the applicable place of payment are
authorized or obligated by law, regulation or executive order to close.
Ranking
Each series of notes will be our general unsecured obligations and will rank equally with all of our existing and future unsubordinated obligations. As of
December 31, 2016, we had $3,208 million of unsecured indebtedness outstanding, $163 million of secured indebtedness outstanding, and $2,141 million of securitized
indebtedness outstanding.
Holders
of any secured indebtedness will have claims that are prior to your claims as holders of the notes, to the extent of the value of the assets securing such indebtedness, in the event of any
bankruptcy, liquidation or similar proceeding.
We
conduct our operations through Subsidiaries. As a result, distributions or advances from our Subsidiaries are a major source of funds necessary to meet our debt service and other obligations.
Contractual provisions, laws or regulations, as well as our Subsidiaries' financial condition and operating requirements, may limit our ability to obtain cash required to pay our debt service
obligations, including payments on the notes. The notes will be "structurally" subordinated to all obligations of our Subsidiaries including claims with respect to trade payables. This means that in
the event of bankruptcy, liquidation or reorganization of any of our Subsidiaries, the holders of notes will have no direct claim to participate in the assets of such Subsidiary but may only recover
by virtue of our equity interest in our Subsidiaries (except to the extent we have a claim as a creditor of such subsidiary). As a result all existing and future liabilities of our Subsidiaries,
including trade payables and claims of lessors under leases, have the right to be satisfied in full prior to our receipt of any payment as any equity owner of our Subsidiaries. As of
December 31, 2016, our Subsidiaries had $163 million of outstanding indebtedness and other liabilities (excluding debt outstanding under our vacation ownership securitization program),
which primarily relate to capital leases, all of which are structurally senior to the notes.
Further issues
The indenture provides that we may issue debt securities thereunder from time to time in one or more series, and permits us to establish the terms of each
series of debt securities at the time of issuance. The indenture does not limit the aggregate amount of debt securities that may be issued under the indenture.
Each
series of notes will constitute a separate series of debt securities under the indenture, initially limited to $300 million of the 2024 notes and $400 million of the 2027 notes.
Under the indenture, we may, from time to time, without the consent of the holders of a series of notes, issue notes having the same terms in all respects as such series of notes, except that interest
will accrue on the additional notes from their date of issuance; provided that if the
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additional
notes are not fungible with the original notes of such series for United States federal income tax purposes, the additional notes will have a separate CUSIP number.
Optional redemption
We may, at our option, at any time and from time to time redeem all or any portion of the notes on not less than 15 nor more than 60 days' prior notice
delivered to registered holders of the notes to be redeemed. Prior to February 1, 2024 (two months prior to the maturity date of the 2024 notes (the "2024 notes Par Call Date")) in the case of
the 2024 notes and prior to January 1, 2027 (three months prior to the maturity date of the 2027 notes (the "2027 notes Par Call Date")) in the case of the 2027 notes, the notes will be
redeemable at a redemption price equal to the greater of:
-
-
100% of the principal amount plus accrued and unpaid interest to, but excluding, the redemption date; and
-
-
the sum, as determined by an Independent Investment Banker, of the present values of the remaining scheduled payments of principal and interest
(exclusive of interest accrued to the date of redemption) discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) on the notes to be
redeemed through (i) the 2024 notes Par Call Date at the Treasury Rate plus 30 basis points with respect to the 2024 notes and (ii) the 2027 notes Par Call Date at the Treasury Rate plus
30 basis points with respect to the 2027 notes, plus, in each case, accrued and unpaid interest to, but excluding, the date of redemption.
We
may redeem at our option all or a portion of (i) the 2024 notes at any time on or after the 2024 notes Par Call Date at a redemption price equal to 100% of the principal amount of the 2024
notes being redeemed and (ii) the 2027 notes at any time on or after the 2027 notes Par Call Date at a redemption price equal to 100% of the principal amount of the 2027 notes being redeemed,
plus, in each case, accrued and unpaid interest on the principal amount being redeemed to, but not including, the redemption date.
If
money sufficient to pay the redemption price of all of the notes (or portions thereof) of a series to be redeemed on the redemption date is deposited with the Trustee or paying agent on or before
the redemption date and certain other conditions are satisfied, then on and after such redemption date, interest will cease to accrue on such notes (or such portion thereof) called for redemption.
"Comparable
Treasury Issue" means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term (assuming that the 2024 notes
matured on the 2024 Par Call Date and the 2027 notes matured on the 2027 Par Call Date) ("Remaining Life") of the notes to be redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the notes.
"Comparable
Treasury Price" means, with respect to any redemption date, (1) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and
lowest such Reference Treasury Dealer Quotations, or (2) if the Independent Investment Banker obtains fewer than four such Reference Treasury Dealer Quotations, the
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average
of all such Reference Treasury Dealer Quotations or, if only one such Reference Treasury Dealer Quotation is obtained, such Reference Treasury Dealer Quotation.
"Independent
Investment Banker" means an independent investment banking institution of national standing appointed by us, which may be one of the Reference Treasury Dealers.
"Reference
Treasury Dealer" means any primary U.S. government securities dealer in New York City (a "Primary Treasury Dealer") that we select. We have selected J.P. Morgan Securities LLC,
Deutsche Bank Securities Inc. and Wells Fargo Securities, LLC and their respective successors as Primary Treasury Dealers.
"Reference
Treasury Dealer Quotation" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Independent Investment Banker, of the bid and
asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker by such Reference Treasury Dealer
at 5:00 p.m., New York City time, on the third business day preceding such redemption date.
"Treasury
Rate" means, with respect to any redemption date, (1) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently
published statistical release designated "H.15(519)" or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on
actively traded United States Treasury securities adjusted to constant maturity under the caption "Treasury Constant Maturities," for the maturity corresponding to the Comparable Treasury Issue (if no
maturity is within three months before or after the Remaining Life, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the
Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month), (2) if the period from the redemption date to the maturity date of
the notes to be redeemed is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used, or (3) if
such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to
maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date. The Treasury Rate shall be calculated on the third business day preceding the redemption date.
If
we elect to redeem less than all of a series of notes, and such notes are at the time represented by a global note, then the depositary will select by lot the particular notes to be redeemed. If we
elect to redeem less than all of a series of notes, and any of such notes are not represented by a global note, then the Trustee will select the particular notes to be redeemed in a manner it deems
appropriate and fair (and the depositary will select by lot the particular interests in any global note to be redeemed).
We
may at any time, and from time to time, purchase the notes at any price or prices in the open market or otherwise.
Any
redemption or notice of any redemption may, at our discretion, be subject to one or more conditions precedent, including, but not limited to, completion of an equity offering, other
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offering,
issuance of indebtedness or other transaction or event. Notice of any redemption in respect thereof may be given prior to the completion thereof and may be partial as a result of only some
of the conditions being satisfied.
If
such redemption or notice is subject to satisfaction of one or more conditions precedent, such notice shall state that, in our discretion, the redemption date may be delayed until such time as any
or all such conditions shall be satisfied (or waived by us in our sole discretion), or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall
not have been satisfied (or waived by us in our sole discretion) by the redemption date, or by the redemption date so delayed.
Repurchase at the option of the holders of notes
If a Change of Control Triggering Event occurs, unless we have exercised our right to redeem the notes as described above, holders of notes will have the
right to require us to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in
excess thereof) of their notes pursuant to the offer described below (the "Change of Control Offer") on the terms set forth in the indenture. In the Change of Control Offer, we will offer payment in
cash equal to 101% of the aggregate principal amount of notes repurchased plus accrued and unpaid interest, if any, on the notes repurchased to but not including the date of purchase (the "Change of
Control Payment").
Within
30 days following any Change of Control Triggering Event, or, at our option, prior to the date of consummation of any Change of Control, but after public announcement of the pending
Change of Control, we will deliver a notice to holders of notes, with a copy to the Trustee, describing the transaction or transactions that constitute the Change of Control and offering to repurchase
the notes on the date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is delivered (the "Change of Control Payment
Date"), pursuant to the procedures required by the indenture and described in such notice. The repurchase obligation with respect to any notice delivered prior to the consummation of the Change of
Control, shall be conditioned on the Change of Control Triggering Event occurring on or prior to the payment date specified in the notice.
We
will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in
connection with the repurchase of the notes as a result of a Change of Control Triggering Event. To the extent that the provisions of any securities laws or regulations conflict with the Change of
Control provisions of the indenture, we will comply with the applicable securities laws and regulations and will not be deemed to have breached our obligations under the Change of Control provisions
of the indenture by virtue of such conflicts.
On
the Change of Control Payment Date, we will, to the extent lawful:
-
-
accept for payment all notes or portions of notes properly tendered pursuant to the Change of Control Offer;
-
-
deposit with the paying agent an amount equal to the Change of Control Payment in respect of all notes or portions of notes properly tendered;
and
-
-
deliver or cause to be delivered to the Trustee the notes properly accepted.
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The
paying agent will promptly mail to each holder of notes properly tendered the purchase price for the notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by
book-entry) to each holder a new note equal in principal amount to any unpurchased portion of any notes surrendered; provided that each new note will be in a principal amount of $2,000 or an integral
multiple of $1,000 in excess thereof.
We
will not be required to make an offer to repurchase the notes upon a Change of Control Triggering Event if a third party makes such an offer in the manner, at the times and otherwise in compliance
with the requirements for an offer made by us and such third party purchases all notes properly tendered and not withdrawn under its offer.
For
purposes of the foregoing discussion of a repurchase at the option of holders and the discussion under "Interest Rate Adjustment," the following definitions are applicable:
"Below
Investment Grade Rating Event" means a series of notes are rated below an Investment Grade Rating by each of the Rating Agencies on any date from the earlier of (1) the occurrence of a
Change of Control or (2) public notice of our intention to effect a Change of Control, in each case until the end of the 60-day period following the earlier of (1) the occurrence of a
Change of Control or (2) public notice of our intention to effect a Change of Control; provided, however, that if (i) during such 60-day period one or more Rating Agencies has publicly
announced that it is considering the possible downgrade of the notes, and (ii) a downgrade by each of the Rating Agencies that has made such an announcement would result in a Below Investment
Grade Rating Event, then such 60-day period shall be extended for such time as the rating of the notes by any such Rating Agency remains under publicly announced consideration for possible downgrade
to a rating below an Investment Grade Rating and a downgrade by such Rating Agency to a rating below an Investment Grade Rating could cause a Below Investment Grade Rating Event. Notwithstanding the
foregoing, a Below Investment Grade Rating Event will not be deemed to have occurred in respect of a particular Change of Control (and thus will not be deemed a Below Investment Grade Rating Event for
purposes of the definition of Change of Control Triggering Event) if the rating agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly
confirm or inform the Trustee in writing at our or its request that the reduction was the result, in
whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control has occurred
at the time of the rating event).
"Change
of Control" means the occurrence of any of the following: (1) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in
one or a series of related transactions, of all or substantially all of the properties or assets of us and our Subsidiaries taken as a whole to any "person" (as that term is used in
Section 13(d)(3) of the Exchange Act) other than us or one of our Subsidiaries; (2) the adoption of a plan relating to our liquidation or dissolution; or (3) the consummation of
any transaction (including, without limitation, any merger or consolidation) the result of which is that any "person" (as defined above) becomes the beneficial owner, directly or indirectly, of 50% or
more of the total voting power of all shares of our capital stock entitled to vote generally in elections of directors. Notwithstanding the foregoing, a transaction will not be deemed to involve a
Change of Control if (i) we become a direct or indirect wholly owned subsidiary of a holding company
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and
(ii)(A) the direct or indirect holders of the voting stock of such holding company immediately following that transaction are substantially the same as the holders of our voting stock immediately
prior to that transaction or (B) immediately following that transaction no person (other than a holding company satisfying the requirements of this sentence) is the beneficial owner, directly
or indirectly, of more than 50% of the voting stock of such holding company.
"Change
of Control Triggering Event" means the occurrence of both a Change of Control and a Below Investment Grade Rating Event.
"Investment
Grade Rating" means a rating equal to or higher than Baa3 (or the equivalent) by Moody's and BBB (or the equivalent) by S&P.
"Moody's"
means Moody's Investors Service, Inc., and its successors.
"Rating
Agencies" means (1) each of Moody's and S&P; and (2) if either of Moody's or S&P ceases to rate the notes or fails to make a rating of the notes publicly available for reasons
outside of our control, a "nationally recognized statistical rating organization" within the meaning of Section 3(a)(62) under the Exchange Act, as amended, selected by us (as certified by a
resolution of our board of directors) as a replacement agency for Moody's or S&P, or both, as the case may be.
"S&P"
means Standard & Poor's Ratings Services, a division of S&P Global, Inc., and its successors.
Interest rate adjustment
The interest rate payable on each series of notes will be subject to adjustments from time to time if either Moody's or S&P or, if either Moody's or S&P
ceases to rate a series of notes or fails to make a rating of a series of notes publicly available for reasons outside our control, a "nationally recognized statistical rating organization" selected
pursuant to the definition of "Rating Agencies" described under "Repurchases at the option of the holders of the notes" (a "substitute rating agency"), downgrades (or downgrades and
subsequently upgrades) the credit rating assigned to such notes, in the manner described below.
If
the rating from Moody's (or any substitute rating agency therefor) of a series of notes is decreased to a rating set forth in the immediately following table, the interest rate on such notes will
increase such that it will equal the interest rate payable on such notes on the date of their initial issuance plus the percentage set forth opposite the ratings from the table below:
|
|
|
|
|
|
|
|
|
Moody's rating*
|
|
Percentage
|
|
|
|
Ba1
|
|
0.25%
|
Ba2
|
|
0.50%
|
Ba3
|
|
0.75%
|
B1 or below
|
|
1.00%
|
|
|
|
* Including
the equivalent ratings of any substitute rating agency.
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Table of Contents
If the rating from S&P (or any substitute rating agency therefor) of a series of notes is decreased to a rating set forth in the immediately following table, the interest rate
on such notes will increase such that it will equal the interest rate payable on such notes on the date of their initial issuance plus the percentage set forth opposite the ratings from the table
below:
|
|
|
|
|
|
|
|
|
S&P rating*
|
|
Percentage
|
|
|
|
BB+
|
|
0.25%
|
BB
|
|
0.50%
|
BB
|
|
0.75%
|
B+ or below
|
|
1.00%
|
|
|
|
* Including
the equivalent ratings of any substitute rating agency.
If
at any time the interest rate on a series of notes has been increased and either Moody's or S&P (or, in either case, a substitute rating agency therefor), as the case may be, subsequently upgrades
its rating of such notes to any of the threshold ratings set forth above, the interest rate on such notes will be decreased such that the interest rate for such notes equals the interest rate payable
on such notes on the date of their initial issuance plus the percentages
set forth opposite the ratings from the tables above in effect immediately following the upgrade in rating. If Moody's (or any substitute rating agency therefor) subsequently upgrades its rating of a
series of notes to Baa3 (or its equivalent, in the case of a substitute rating agency) or higher, and S&P (or any substitute rating agency therefor) upgrades its rating to BBB- (or its equivalent, in
the case of a substitute rating agency) or higher, the interest rate on such notes will be decreased to the interest rate payable on such notes on the date of their initial issuance (and if one such
upgrade occurs and the other does not, the interest rate on such notes will be decreased so that it does not reflect any increase attributable to the upgrading Rating Agency). In addition, the
interest rates on a series of notes will permanently cease to be subject to any adjustment described above (notwithstanding any subsequent downgrade in the ratings by either or both rating agencies)
if such notes become rated Baa1 and BBB+ (or the equivalent of either such rating, in the case of a substitute rating agency) or higher by Moody's and S&P (or, in either case, a substitute rating
agency therefor), respectively (or one of these ratings if such notes are only rated by one rating agency).
Each
adjustment required by any downgrade or upgrade in a rating set forth above, whether occasioned by the action of Moody's or S&P (or, in either case, a substitute rating agency therefor), shall be
made independent of any and all other adjustments. In no event shall (1) the interest rate for a series of notes be reduced to below the interest rate payable on such notes on the date of their
initial issuance or (2) the total increase in the interest rate on a series of notes exceed 2.00% above the interest rate payable on such notes on the date of their initial issuance.
No
adjustments in the interest rate of the notes shall be made solely as a result of a Rating Agency ceasing to provide a rating of any series of notes. If at any time Moody's or S&P ceases to provide
a rating of either series of notes, we will use our commercially reasonable efforts to obtain a rating of such notes from a substitute rating agency, to the extent one exists, and if a substitute
rating agency exists, for purposes of determining any increase or decrease in the interest rate on such notes pursuant to the tables above (a) such substitute rating agency will be substituted
for the last Rating Agency to provide a rating of such notes but which has since
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ceased
to provide such rating, (b) the relative rating scale used by such substitute rating agency to assign ratings to senior unsecured debt will be determined in good faith by an independent
investment banking institution of national standing appointed by us and, for purposes of determining the applicable ratings included in the applicable table above with respect to such substitute
rating agency, such ratings will be deemed to be the equivalent ratings used by Moody's or S&P, as applicable, in such table and (c) the interest rate on such notes will increase or decrease,
as the case may be, such that the interest rate equals the interest rate payable on
such notes on the date of their initial issuance plus the appropriate percentage, if any, set forth opposite the rating from such substitute rating agency in the applicable table above (taking into
account the provisions of clause (b) above) (plus any applicable percentage resulting from a decreased rating by the other Rating Agency).
For
so long as only one Rating Agency provides a rating of a series of notes, any subsequent increase or decrease in the interest rate of such series of notes necessitated by a reduction or increase
in the rating by the Rating Agency providing the rating shall be twice the percentage set forth in the applicable table above. For so long as none of Moody's or S&P (or, in either case, a substitute
rating agency therefor) provides a rating of a series of notes, the interest rate on such series of notes will increase to, or remain at, as the case may be, 2.00% above the interest rate payable on
such notes on the date of their initial issuance.
Any
interest rate increase or decrease described above will take effect from the first interest payment date following the date on which a rating change occurs that requires an adjustment in the
interest rate. As such, interest will not accrue at such increased or decreased rate until the next interest payment date following the date on which a rating change occurs. If Moody's or S&P (or, in
either case, a substitute rating agency therefor) changes its rating of a series of notes more than once prior to any particular interest payment date, the last change by such agency prior to such
interest payment date will control for purposes of any interest rate increase or decrease with respect to such notes described above relating to such Rating Agency's action. If the interest rate
payable on a series of notes is increased as described above, the term "interest," as used with respect to such notes, will be deemed to include any such additional interest unless the context
otherwise requires.
Merger, consolidation or sale of assets
Under the terms of the indenture, we will be permitted to consolidate or merge with another entity or to sell all or substantially all of our assets to
another entity, subject to our meeting all of the following conditions:
-
-
the resulting, surviving or transferee entity (if other than us) must expressly assume through a supplemental indenture our obligations under
the indenture;
-
-
immediately following the consolidation, merger, sale or conveyance, no Event of Default (as defined below) shall have occurred and be
continuing; and
-
-
the resulting, surviving or transferee entity is a corporation or a limited liability company organized and validly existing under the laws of
the United States or any jurisdiction thereof, Canada, Mexico, Switzerland, the United Kingdom or any other country that is a member country of the European Union on the date of the supplemental
indenture, and in each case any jurisdiction of the foregoing.
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In
the event that we consolidate or merge with another entity or sell all or substantially all of our assets to another entity, the surviving entity will be substituted for us under the indenture, and
we will be discharged from all of our obligations under the indenture.
Although
there is a limited body of case law interpreting the phrase "all or substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, in certain
circumstances there may be a degree of uncertainty as to whether a particular transaction would involve a disposition of "all or substantially all" of our assets. As a result, it may be unclear as to
whether the merger, consolidation or sale of assets covenant would apply to a particular transaction as described above absent a decision by a court of competent jurisdiction.
Any
merger, consolidation or sale of our assets as described above might be deemed for United States federal income tax purposes to be an exchange of your notes for new notes, resulting in recognition
of taxable gain or loss for those purposes, and possibly also adverse withholding or other tax consequences of holding or disposing of the notes thereafter. You should consult your tax adviser
regarding the United States federal, state, local, and if applicable, non-United States, income and other tax consequences of such an event.
For
the avoidance of doubt, this covenant will not apply to transactions by and among us and our subsidiaries.
Additional amounts
All payments made by the Company, including any successor thereto, on each series of notes will be made without withholding or deduction for, or on account
of, any present or future taxes, duties, assessments or governmental charges of whatever nature ("Taxes") unless the withholding or deduction of such Taxes is then required by law. If, as discussed in
"Merger, consolidation or sale of assets," as a result of or following a merger or consolidation of the Company with, or a sale by the Company of all or substantially all of its assets
to, an entity that is organized under the laws of a jurisdiction outside of the United States (a "Change in Domicile"), any deduction or withholding is at any time required for, or on account of, any
Taxes imposed or levied by or on behalf of:
(1) any
jurisdiction (other than the United States) from or through which the Company makes (or, as a result of the Company's connection with such jurisdiction, is deemed to make) a
payment or delivery on a series of notes, or any political subdivision or governmental authority thereof or therein having the power to tax; or
(2) any
other jurisdiction (other than the United States) in which the Company is organized or otherwise considered to be a resident or doing business for tax purposes, or any political
subdivision or governmental authority thereof or therein having the power to tax (each of clauses (1) and (2), a "Relevant Taxing Jurisdiction");
in
respect of any payment or delivery on a series of notes, then we will pay (together with such payment or delivery) such additional amounts (the "Additional Amounts") as may be necessary in order
that the net amounts received in respect of such payment or delivery by each beneficial owner of such notes after such withholding or deduction (including any such deduction or withholding from such
Additional Amounts), will equal the amount that would have been received in respect of such payment or delivery in the absence of such withholding
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or
deduction; provided, however, that Additional Amounts shall be payable only to the extent necessary so that the net amount received by the holder, after taking into account such withholding or
deduction, equals the amount that would have been received by the holder in the absence of a Change in Domicile; provided, further, that no such Additional Amounts will be payable with respect to:
(1) any
Taxes that would have been imposed absent a Change in Domicile;
(2) any
Taxes that would not have been so imposed but for the existence of any present or former connection between the beneficial owner (or between a fiduciary, settlor, beneficiary,
member or shareholder of, or possessor of power over the relevant beneficial owner, if the relevant beneficial owner is an estate, nominee, trust or corporation) and the Relevant Taxing Jurisdiction
(including the beneficial owner being a citizen or resident or national of, or carrying on a business or maintaining a permanent establishment in, or being physically present in, the Relevant Taxing
Jurisdiction) other than by the mere ownership or holding of such note or enforcement of rights thereunder or the receipt of payments in respect thereof;
(3) any
Taxes that would not have been so imposed if the beneficial owner had made a declaration of non-residence or any other claim or filing for exemption to which it is entitled
(provided that (x) such declaration of non-residence or other claim or filing for exemption is required by the applicable law of the Relevant Taxing Jurisdiction as a precondition to exemption
from the requirement to deduct or withhold such Taxes and (y) at least 30 days prior to the first payment date with respect to which such declaration of non-residence or other claim or
filing for exemption is required under the applicable law of the Relevant Taxing Jurisdiction, the relevant beneficial owner at that time has been notified (in accordance with the procedures set forth
in "Notices") by the Company or any other person through whom payment may be made that a declaration of non-residence or other claim or filing for exemption is required to be made);
(4) any
note presented for payment (where presentation is required) more than 30 days after the relevant payment is first made available for payment to the beneficial owner (except
to the extent that the beneficial owner would have been entitled to Additional Amounts had the note been presented during such 30 day period);
(5) any
Taxes that are payable otherwise than by withholding from a payment or delivery on the notes;
(6) any
estate, inheritance, gift, sale, transfer, personal property or similar tax, assessment or other governmental charge; or
(7) any
Taxes that could have been avoided by the presentation (where presentation is required) of the relevant note to another Paying Agent in a member state of the European Union.
Such
Additional Amounts will also not be payable where, had the beneficial owner of the note been the holder of the note, it would not have been entitled to payment of Additional Amounts by reason of
any of clauses (1) to (7) inclusive above.
The
Company will (i) make any required withholding or deduction and (ii) remit the full amount deducted or withheld to the Relevant Taxing Jurisdiction in accordance with applicable
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law.
The Company will use commercially reasonable efforts to obtain certified copies of tax receipts evidencing the payment of any Taxes so deducted or withheld from each Relevant Taxing Jurisdiction
imposing such Taxes and to the extent received will use commercially reasonable efforts to provide such certified copies to each holder. The Company will attach to each certified copy a certificate
stating (x) that the amount of withholding Taxes evidenced by the certified copy was paid in connection with payments in respect of the principal amount of notes then outstanding and
(y) the amount of such withholding Taxes paid per $1,000 principal amount of the notes. Copies of such documentation will be available for inspection during ordinary business hours at the
office of the Trustee by the holders of the notes upon request and will be made available at the offices of the paying agent.
At
least 30 days prior to each date on which any payment under or with respect to the notes is due and payable (unless such obligation to pay Additional Amounts arises shortly before or after
the 30th day prior to such date, in which case it shall be promptly thereafter), if the Company will be obligated to pay Additional Amounts with respect to such payment, the Company will
deliver to the trustee an Officers' Certificate stating the fact that such Additional Amounts will be payable, the amounts so payable and will set forth such other information necessary to enable the
trustee to pay such Additional Amounts to holders on the payment date. Each such Officers' Certificate shall be relied upon until receipt of a further Officers' Certificate addressing such matters.
Wherever
in the indenture, the notes or this description of notes there are mentioned, in any context:
-
(1)
-
the
payment of principal,
-
(2)
-
purchase
prices in connection with a purchase of notes,
-
(3)
-
interest,
or
-
(4)
-
any
other amount payable on or with respect to the notes,
such
reference shall be deemed to include payment of Additional Amounts as described under this heading to the extent that, in such context, Additional Amounts are, were or would be payable in respect
thereof.
The
foregoing obligations will survive any termination, defeasance or discharge of the indenture and will apply mutatis mutandis to any jurisdiction in which any successor to the Company is organized
or any political subdivision or taxing authority or agency thereof or therein.
Limitations on liens
The indenture provides that we will not, and will not permit any Restricted Subsidiary to, directly or indirectly, incur, assume or guarantee any Indebtedness
secured by a
Lien on any of our or any of our Restricted Subsidiaries' capital stock, properties or assets, unless we secure the notes equally and ratably with the Indebtedness secured by such Lien for so long as
such Indebtedness is secured. The restrictions do not apply to Indebtedness that is secured by:
-
-
Liens existing on the date the notes are issued;
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-
-
Liens on any property or any Indebtedness of a person existing at the time the person becomes a Subsidiary (whether by acquisition, merger or
consolidation) which were not incurred in anticipation thereof;
-
-
Liens in favor of us or our Subsidiaries;
-
-
Liens existing at the time of acquisition of the assets encumbered thereby which were not incurred in anticipation of such acquisition;
-
-
purchase money Liens which secure Indebtedness that does not exceed the cost of the purchased property; and
-
-
Liens on real property acquired after the date on which the notes are first issued which secure Indebtedness incurred to acquire such real
property or improve such real property so long as (i) such Indebtedness is incurred on the date of acquisition of such real property or within 180 days of the acquisition of such real
property; (ii) such Liens secure Indebtedness in an amount no greater than the purchase price or improvement price, as the case may be, of such real property so acquired; and (iii) such
Liens do not extend to or cover any property of ours or any Restricted Subsidiary other than the real property so acquired.
The
restrictions do not apply to extensions, renewals or replacements of any Indebtedness (and for the avoidance of doubt, any successive extensions, renewals or replacements of such Indebtedness)
secured by the foregoing types of Liens; so long as the principal amount of Indebtedness secured thereby shall not exceed the amount of Indebtedness existing at the time of such extension, renewal or
replacement (plus an amount equal to any premiums, accrued interest, fees and expenses payable in connection therewith).
For
the avoidance of doubt, an increase in the amount of Indebtedness in connection with any accrual of interest, accretion of accreted value, amortization of original issue discount, payment of
interest in the form of additional Indebtedness with the same terms, and accretion of original issue discount and increases in the amount of Indebtedness outstanding solely as a result of fluctuations
in the exchange rate of currencies or increases in the value of property securing Indebtedness, shall not constitute an assumption, incurrence or guarantee for the purposes of this covenant, so long
as the original Liens securing such Indebtedness were permitted under the Indenture.
Notwithstanding
the foregoing restrictions, without securing the notes as described above, we and the Restricted Subsidiaries may, directly or indirectly, incur, assume or guarantee any Indebtedness
secured by Liens that this covenant would otherwise restrict if the sum of (i) the aggregate of all Indebtedness secured by such Liens and (ii) any Attributable Debt (as defined below)
related to any permitted sale and leaseback arrangement (see "Limitations on sale and leaseback transactions") does not exceed the greater of (i) 10% of our Consolidated Net Assets
(as defined below) and (ii) $500 million.
Limitations on sale and leaseback transactions
We will covenant in the indenture that neither we nor any Restricted Subsidiary will enter into any arrangement with any person to lease a Principal Property
(except for any arrangements that exist on the date the notes are issued or that exist at the time any person that owns a
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Principal
Property becomes a Restricted Subsidiary) which has been or is to be sold by us or the Restricted Subsidiary to such person unless:
-
-
the sale and leaseback arrangement involves a lease for a term of not more than three years;
-
-
the sale and leaseback arrangement is entered into between us and any Subsidiary or between our Subsidiaries;
-
-
we or the Restricted Subsidiary would be entitled to incur Indebtedness secured by a Lien on the Principal Property at least equal in amount to
the Attributable Debt permitted pursuant to the last paragraph under "Limitations on liens" without having to secure equally and ratably the notes;
-
-
the proceeds of the sale and leaseback arrangement are at least equal to the fair market value (as determined by our Board of Directors in good
faith) of the Principal Property and we apply within 180 days after the sale an amount equal to the greater of the net proceeds of the sale or the Attributable Debt associated with the
Principal Property to (i) the retirement of long-term debt for borrowed money that is not subordinated to the notes and that is not debt to us or a Subsidiary, or (ii) the purchase or
development of other comparable property; or
-
-
the sale and leaseback arrangement is entered into within 180 days after the initial acquisition of the Principal Property subject to
the sale and leaseback arrangement.
"Attributable
Debt" means, with regard to a sale and leaseback arrangement of a Principal Property, an amount equal to the lesser of: (a) the fair market value of the Principal Property (as
determined in good faith by our Board of Directors); or (b) the present value of the total net amount of rent payments to be made under the lease during its remaining term, discounted at the
rate of interest set forth or implicit in the terms of the lease, compounded semi-annually. The calculation of the present value of the total net amount of rent payments is subject to adjustments to
be specified in the indenture.
"Capitalized
Lease Obligations" of any Person means the obligations of such Person to pay rent or other amounts under a lease that is accounted for as a capital lease, and the amount of such
obligation shall be the capitalized amount thereof determined in accordance with GAAP.
"Consolidated
Net Assets" means the consolidated total assets of the Company and its Subsidiaries, after deducting therefrom all current liabilities of Company and its Subsidiaries (other than the
current portion of long-term Indebtedness of the Company and its Subsidiaries and Capitalized Lease Obligations of the Company and its Subsidiaries), all as set forth on the latest consolidated
balance sheet of the Company prepared in accordance with GAAP.
"GAAP"
means generally accepted accounting principles in the United States which are in effect on September 15, 2015.
"Person"
means any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Principal
Property" means an asset or assets owned by us or any Restricted Subsidiary having a gross book value in excess of $50,000,000.
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SEC reports
The indenture will provide that (i) any documents or reports that we are required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act must be filed by us with the Trustee within 15 days after the same are required to be filed with the SEC (giving effect to any grace period provided by Rule 12b-25 under the
Exchange Act) and (ii) whether or not we are subject to Section 13 or 15(d) of the Exchange Act, we will, within 15 days after each of the respective dates by which we would have
been required to file annual reports or quarterly reports if we were so subject, furnish to the Trustee (a) all financial statements that would be required to be contained in an annual report
on Form 10-K, or any successor or comparable form, filed with the SEC, a "Management's Discussion and Analysis of Financial Condition and Results of Operations," and a report on the annual
financial statements by the Company's independent registered public accounting firm and (b) after the end of each
of the first three fiscal quarters of each fiscal year, all financial statements that would be required to be contained in a quarterly report on Form 10-Q, or any successor or comparable form,
filed with the SEC. Substantially concurrently with the furnishing or making such information available to the Trustee pursuant to clause (ii) of the immediately preceding sentence, the Company
shall also post copies of such information required by clause (ii) of the immediately preceding sentence on a website (which may be nonpublic and may be maintained by the Company or a third
party) to which access will be given to holders. Notwithstanding anything to the contrary set forth above, if the Company or any parent entity of the Company has furnished to the holders of the notes
and the Trustee or filed with the SEC the reports described above with respect to the Company or any parent entity of the Company, the Company shall be deemed to be in compliance with the requirements
set forth in the first sentence of this paragraph; provided that, if the financial information so furnished relates to any parent entity of the Company, the same is accompanied by consolidating
information, that explains in reasonable detail the differences between the information relating to such parent entity, on the one hand, and the information relating to the Company on a standalone
basis, on the other hand. For the avoidance of doubt, the consolidating information referred to in the proviso in the preceding sentence need not be audited.
Events of default
Holders of notes will have specified rights if an Event of Default (as defined below) occurs.
The
term "Event of Default" in respect of a series of notes means any of the following:
-
-
we do not pay interest, including any additional interest and any additional amounts, on any note within 30 days of its due date;
-
-
we do not pay the principal of or any premium on any note of such series, including any additional amount, when due and payable, at maturity,
or upon acceleration or redemption;
-
-
failure by us to comply with our obligations under "Merger, consolidation or sale of assets;"
-
-
we remain in breach of a covenant or warranty in respect of the indenture or any note of such series (other than a covenant included in the
indenture solely for the benefit of debt securities of another series) for 60 days after we receive a written notice of default, which notice must be sent by either the Trustee or holders of at
least 25% in principal amount of the outstanding notes;
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-
-
indebtedness of ours or any of our Restricted Subsidiaries of at least $50,000,000 in aggregate principal amount is accelerated which
acceleration has not been rescinded or annulled after 30 days notice thereof;
-
-
we or any of our significant subsidiaries (other than any securitization entity), as defined in Article 1, Rule 1-02 of
Regulation S-X, file for bankruptcy, or other events of bankruptcy, insolvency or reorganization specified in the indenture; or
-
-
a final judgment for the payment of $50 million or more (excluding any amounts covered by insurance) rendered against us or any of our
significant subsidiaries (other than any securitization entity), as defined in Article 1, Rule 1-02 of Regulation S-X, which judgment is not discharged or stayed within
60 days after (i) the date on which the right to appeal thereof has expired if no such appeal has commenced, or (ii) the date on which all rights to appeal have been extinguished.
If
an Event of Default with respect to a series of notes has occurred, the Trustee or the holders of at least 25% in principal amount of the series of notes may declare the entire unpaid principal
amount of (and premium, if any), and all the accrued interest on, such notes to be due and immediately payable. This is called a declaration of acceleration of maturity. There is no action on the part
of the Trustee or any holder of such series of notes required for such declaration if the Event of Default is the Company's bankruptcy, insolvency or reorganization. Holders of a majority in principal
amount of such series of notes may also waive certain past defaults under the indenture with respect to such series of notes on behalf of all of the holders of the notes. A declaration of acceleration
of maturity may be canceled, under specified circumstances, by the holders of at least a majority in principal amount of such series of notes and the Trustee.
The
Trustee shall not be deemed to have notice of any Default or Event of Default unless a responsible officer of the Trustee has received, at the corporate trust office, written notification
specifying such Default or Event of Default.
Notwithstanding
the foregoing, the indenture will provide that, to the extent we elect, the sole remedy for an Event of Default relating to (i) our failure to file with the Trustee pursuant to
Section 314(a)(1) of the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), any documents or reports that we are required to file with the SEC pursuant to Section 13 or
15(d) of the Exchange Act or (ii) our failure to comply with our obligations as set forth under "SEC reports" above, will after the occurrence of such an Event of Default, consist
exclusively of the right to receive additional interest on such series of notes at a rate equal to:
-
-
0.25% per annum of the principal amount of such series of notes outstanding for each day during the 60-day period beginning on, and including,
the occurrence of such an Event of Default during which such Event of Default is continuing; and
-
-
0.50% per annum of the principal amount of such series of notes outstanding for each day during the 120-day period beginning on, and including,
the 61st day following, and including, the occurrence of such an Event of Default during which such Event of Default is continuing;
provided, however
, that in no event shall additional interest accrue under the terms of the indenture at an annual rate in excess of 0.50% during the
six-month period beginning on, and including, the date which is six months after the last date of original issuance of such series of notes for any failure to timely file any document or report that
we are required to file with
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the
SEC pursuant to Section 13 or 15(d) of the Exchange Act, as applicable (after giving effect to all applicable grace periods thereunder and other than reports on Form 8-K).
If
we so elect, such additional interest will be payable in the same manner and on the same dates as the stated interest payable on such series of notes. On the 181st day after such Event of
Default (if the Event of Default relating to the reporting obligations is not cured or waived prior to such 181st day), such series of notes will be subject to acceleration as provided above.
The provisions of the indenture described in this paragraph will not affect the rights of holders of such series of notes in the event of the occurrence of any other Event of Default. In the event we
do not elect to pay the additional interest following an Event of Default in accordance with this paragraph, such series of notes will be subject to acceleration as provided above.
In
order to elect to pay the additional interest as the sole remedy during the first 180 days after the occurrence of an Event of Default relating to the failure to comply with the reporting
obligations in accordance with the immediately preceding paragraph, we must notify all holders of such series of notes and the Trustee and paying agent of such election prior to the beginning of such
180-day period. Upon our failure to timely give such notice, such series of notes will be immediately subject to acceleration as provided above.
Except
in cases of default, where the Trustee has special duties, the Trustee is not required to take any action under the indenture at the request of holders unless the holders offer the Trustee
protection from expenses and liability satisfactory to the Trustee. If an indemnity satisfactory to the Trustee is provided, the holders of a majority in principal amount of such series of notes may
direct the time, method and place of conducting any lawsuit or other formal legal action seeking any remedy available to the Trustee. The Trustee may refuse to follow those directions in certain
circumstances specified in the indenture. No delay or omission in exercising any right or remedy will be treated as a waiver of the right, remedy or Event of Default.
Before
holders are allowed to bypass the Trustee and bring a lawsuit or other formal legal action or take other steps to enforce their rights or protect their interests relating to a series of notes,
the following must occur:
-
-
such holders must give the Trustee written notice that an Event of Default has occurred and remains uncured;
-
-
holders of at least 25% in principal amount of such series of notes must make a written request that the Trustee take action because of the
default and must offer the Trustee indemnity satisfactory to the Trustee against the cost and other liabilities of taking that action; and
-
-
the Trustee must have failed to take action for 60 days after receipt of the notice and offer of indemnity.
Holders
are, however, entitled at any time to bring a lawsuit for the payment of money due on a series notes on or after the due date.
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Modification of the indenture
The indenture provides that we and the Trustee may, without the consent of any holders of the debt securities, enter into supplemental indentures for the
purposes, among other things, of:
-
-
curing ambiguities, inconsistencies or mistakes in the indenture or making any other provisions with respect to matters or questions arising
under the indenture or the notes;
-
-
providing for the assumption by a successor corporation of the obligations of the Company under the indenture;
-
-
adding guarantees with respect to the notes;
-
-
securing the notes;
-
-
adding to the covenants of the Company for the benefit of the holders or surrendering any right or power conferred upon the Company;
-
-
adding additional events of default;
-
-
making any change that does not adversely affect the rights of any holder;
-
-
changing or eliminating any provisions of the indenture so long as there are no holders entitled to the benefit of the provisions;
-
-
complying with any requirement of the SEC in connection with the qualification of the indenture under the Trust Indenture Act; or
-
-
conforming the provisions of the indenture and the notes to the "Description of notes" section in this prospectus supplement.
With
specific exceptions, the indenture or the rights of the holders of each series of notes may be modified by us and the Trustee with the consent of the holders of a majority in aggregate principal
amount of such series of notes, but no modification may be made without the consent of the holder of each outstanding note of a series that would:
-
-
extend the maturity of any payment of principal of or any installment of interest on any notes of such series;
-
-
reduce the principal amount of any note of such series, or the interest, including additional interest, thereon, or any premium payable on any
note of such series upon redemption thereof;
-
-
change our obligation to pay additional amounts;
-
-
change any place of payment where, or the currency in which, any note of such series or any premium or interest is denominated as payable;
-
-
change the ranking of the notes of such series;
-
-
impair the right to sue for the enforcement of any payment on or with respect to any note of such series; or
-
-
reduce the percentage in principal amount of outstanding notes of such series required to consent to any supplemental indenture, any waiver of
compliance with provisions of the
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indenture
or specific defaults and their consequences provided for in the indenture, or otherwise modify the sections in the indenture relating to these consents.
Defeasance and covenant defeasance
We may elect either (i) to defease and be discharged from any and all obligations with respect to the debt securities of any series (except as
otherwise provided in the indenture) ("defeasance") or (ii) to be released from our obligations with respect to certain covenants that are described in the indenture ("covenant defeasance"),
upon the deposit with the Trustee, in trust for such purpose, of money and/or government obligations that through the payment of principal and interest in accordance with their terms will provide
money in an amount sufficient, without reinvestment, to pay the principal of, premium, if any, and interest on each series of notes to maturity or redemption, as the case may be, and any mandatory
sinking fund or analogous senior payments thereon. As a condition to defeasance or covenant defeasance, we must deliver to the Trustee an opinion of counsel to the effect that the holders of such
series of notes will not recognize income, gain or loss for United States federal income tax purposes as a result of such defeasance or covenant defeasance and will be subject to United States federal
income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance or covenant defeasance had not occurred. Such opinion of counsel, in the case of
defeasance under clause (i) above, must refer to and be based upon a ruling of the Internal Revenue Service or a change in applicable United States federal income tax law occurring after the
date of the indenture. We may exercise our defeasance option with respect to debt securities notwithstanding our prior exercise of our covenant defeasance option. If we exercise our defeasance option,
payment of such series of notes may not thereafter be accelerated because of an Event of Default.
If
we exercise our covenant defeasance option, payment of such series of notes may not thereafter be accelerated by reference to any covenant from which we are released as described under
clause (ii) of the immediately preceding paragraph. However, if acceleration were to occur for other reasons, the realizable value at the acceleration date of the money and government
obligations in the defeasance trust could be less than the principal and interest then due on such series of notes, in that the required deposit in the defeasance trust is based
upon scheduled cash flows rather than market value, which will vary depending upon interest rates and other factors.
The trustee and transfer and paying agent
U.S. Bank National Association, acting through its corporate trust office at 100 Wall Street, Suite 1600, New York, New York 10005, is the Trustee for
the notes and is the transfer and paying agent for the notes. Principal and interest will be payable, and the notes will be transferable, at the office of the paying agent. We may, however, pay
interest by check mailed to registered holders of the notes who hold certificated notes. At the maturity of the notes, the principal, together with accrued interest thereon, will be payable in
immediately available funds upon surrender of such notes at the office of the Trustee.
No
service charge will be made for any transfer or exchange of the notes, but we and the Trustee may, except in specific cases not involving any transfer, require payment of a sufficient amount to
cover any tax or other governmental charge payable in connection with the transfer or exchange.
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Payments
of principal of, any premium on, and any interest on individual notes represented by a global note registered in the name of a depositary or its nominee will be made to the depositary or its
nominee as the registered owner of the global note representing the notes. Neither we, the Trustee, any paying agent, nor the transfer agent for the notes will have any responsibility or liability for
the records relating to or payments made on account of beneficial ownership interests of the global note for the notes or for maintaining, supervising or reviewing any records relating to the
beneficial ownership interests.
We
expect that the depositary for the notes or its nominee, upon receipt of any payment of principal, premium or interest in respect of a permanent global note representing the notes, will immediately
credit participants' accounts with payments in amounts proportionate to their beneficial interests in the principal amount of the global note for the notes as shown on the records of the depositary or
its nominee. We also expect that payments by participants to
owners of beneficial interests in the global note held through the participants will be governed by standing instructions and customary practices, as is now the case with securities held for the
accounts of customers in bearer form or registered in "street name." The payments will be the responsibility of those participants.
In
specific instances, we or the holders of a majority of the then outstanding principal amount of the notes may remove the Trustee and appoint a successor Trustee. The Trustee may become the owner or
pledgee of the notes with the same rights, subject to conflict of interest restrictions, it would have if it were not the Trustee. The Trustee and any successor trustee must be eligible to act as
trustee under Section 310(a)(1) of the Trust Indenture Act and shall have a combined capital and surplus of at least $50,000,000 and be subject to examination by federal or state authority.
Subject to applicable law relating to conflicts of interest, the Trustee may also serve as trustee under other indentures relating to securities issued by us or our affiliated companies and may engage
in commercial transactions with us and our affiliated companies.
Notices
Notices to holders of debt securities will be delivered to the addresses of such holders as they appear in the security register.
Title
We, the Trustee and any agent of ours may treat the registered owner of any debt security as the absolute owner thereof (whether or not the debt security
shall be overdue and notwithstanding any notice to the contrary) for the purpose of making payment and for all other purposes.
Replacement of notes
We will replace any mutilated note at the expense of the holders upon surrender to the Trustee. We will replace notes that become destroyed, lost or stolen at
the expense of the holder upon delivery to the Trustee of satisfactory evidence of the destruction, loss or theft thereof. In the event of a destroyed, lost or stolen note, an indemnity or security
satisfactory to us and the Trustee may be required at the expense of the holder of the note before a replacement note will be issued.
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Governing law
The indenture and the notes will be governed by, and construed in accordance with, the laws of the State of New York.
Book entry, delivery and form
Each series of notes will be issued in the form of one or more fully registered global notes (each a "global note") which will be deposited with, or on behalf
of, The Depository Trust Company, New York, New York (the "Depositary") and registered in the name of Cede & Co., the Depositary's nominee. We will not issue notes in certificated form
except in certain circumstances. Beneficial interests in the global notes will be represented through book-entry accounts of financial institutions acting on behalf of beneficial owners as direct and
indirect participants in the Depositary (the "Depositary Participants"). Investors may elect to hold interests in the global notes through either the Depositary (in the United States), or Clearstream
Banking Luxembourg S.A. ("Clearstream Luxembourg") or Euroclear
Bank S.A./N.V., as operator of the Euroclear System ("Euroclear") (in Europe) if they are participants in those systems, or indirectly through organizations that are participants in those
systems. Clearstream Luxembourg and Euroclear will hold interests on behalf of their participants through customers' securities accounts in Clearstream Luxembourg's and Euroclear's names on the books
of their respective depositaries, which in turn will hold such interests in customers' securities accounts in the depositaries' names on the books of the Depositary. At the present time, Citibank,
N.A. acts as U.S. depositary for Clearstream Luxembourg and JPMorgan Chase Bank acts as U.S. depositary for Euroclear (the "U.S. Depositaries"). Beneficial interests in the global notes will be held
in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. Except as set forth below, the global notes may be transferred, in whole but not in part, only to another nominee
of the Depositary or to a successor of the Depositary or its nominee.
The
Depositary has advised us that it is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of
the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of
the Exchange Act. The Depositary holds securities that its participants ("Direct Participants") deposit with the Depositary. The Depositary also facilitates the settlement among Direct Participants of
securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Direct Participants' accounts, thereby eliminating the need for
physical movement of securities certificates. Direct Participants include securities brokers and dealers (which may include the underwriters), banks, trust companies, clearing corporations and certain
other organizations. The Depositary is owned by a number of its Direct Participants and by NYSE Euronext and the Financial Industry Regulatory Authority, Inc. Access to the Depositary's
book-entry system is also available to others such as securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly ("Indirect Participants"). The rules applicable to the Depositary and its Direct and Indirect Participants are on file with the SEC.
Clearstream
Luxembourg has advised us that it is incorporated under the laws of Luxembourg as a professional depositary. Clearstream Luxembourg holds securities for its participating organizations,
known as Clearstream Luxembourg participants, and facilitates the clearance and settlement of securities transactions between Clearstream Luxembourg participants through
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electronic
book-entry changes in accounts of Clearstream Luxembourg participants, thereby eliminating the need for physical movement of certificates. Clearstream Luxembourg provides
to Clearstream Luxembourg participants, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and
borrowing. Clearstream Luxembourg interfaces with domestic markets in several countries. As a professional depositary, Clearstream Luxembourg is subject to regulation by the Luxembourg Commission for
the Supervision of the Financial Sector, also known as the Commission de Surveillance du Secteur Financier. Clearstream Luxembourg participants are recognized financial institutions around the world,
including underwriters, securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Indirect access to Clearstream Luxembourg is also available to
others, such as banks, brokers, dealers and trust companies that clear through, or maintain a custodial relationship with, a Clearstream Luxembourg participant either directly or indirectly.
Distributions
with respect to the notes held beneficially through Clearstream Luxembourg will be credited to the cash accounts of Clearstream Luxembourg participants in accordance with its rules and
procedures, to the extent received by the U.S. Depositary for Clearstream Luxembourg.
Euroclear
has advised us that it was created in 1968 to hold securities for its participants, known as Euroclear participants, and to clear and settle transactions between Euroclear participants and
between Euroclear participants and participants of certain other securities intermediaries through simultaneous electronic book-entry delivery against payment, eliminating the need for physical
movement of certificates and any risk from lack of simultaneous transfers of securities and cash. Euroclear is owned by Euroclear Clearance System Public Limited Company and operated through a license
agreement by Euroclear Bank S.A./N.V., known as the Euroclear operator. The Euroclear operator provides Euroclear participants, among other things, with safekeeping, administration, clearance
and settlement, securities lending and borrowing and related services. Euroclear participants include banks (including central banks), securities brokers and dealers and other professional financial
intermediaries and may include the underwriters.
Indirect
access to Euroclear is also available to others that clear through or maintain a custodial relationship with a Euroclear participant, either directly or indirectly.
The
Euroclear operator is regulated and examined by the Belgian Banking and Finance Commission.
Securities
clearance accounts and cash accounts with the Euroclear operator are governed by the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear
System, and applicable Belgian law, collectively referred to as the terms and conditions. The terms and conditions govern transfers of securities and cash within Euroclear, withdrawals of securities
and cash from Euroclear, and receipts of payments with respect to
securities in Euroclear. All securities in Euroclear are held on a fungible basis without attribution of specific certificates to specific securities clearance accounts. The Euroclear operator acts
under the terms and conditions only on behalf of Euroclear participants, and has no record of or relationship with persons holding through Euroclear participants.
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Distributions
with respect to notes held beneficially through Euroclear will be credited to the cash accounts of Euroclear participants in accordance with the terms and conditions, to the extent
received by the U.S. Depositary for Euroclear.
If
the Depositary is at any time unwilling or unable to continue as depositary and a successor depositary is not appointed by us within 90 days, we will issue the notes in definitive form in
exchange for the entire global note representing such notes. In addition, we may at any time, and in our sole discretion, determine not to have the notes represented by the global note and, in such
event, will issue notes in definitive form in exchange for the global note representing such notes. In any such instance, an owner of a beneficial interest in the global note will be entitled to
physical delivery in definitive form of notes represented by such global note equal in principal amount to such beneficial interest and to have such notes registered in its name.
Title
to book-entry interests in the notes will pass by book-entry registration of the transfer within the records of Clearstream Luxembourg, Euroclear or the Depositary, as the case may be, in
accordance with their respective procedures. Book-entry interests in the notes may be transferred within Clearstream Luxembourg and within Euroclear and between Clearstream Luxembourg and Euroclear in
accordance with procedures established for these purposes by Clearstream Luxembourg and Euroclear. Book-entry interests in the notes may be transferred within the Depositary in accordance with
procedures established for this purpose by the Depositary. Transfers of book-entry interests in the notes among Clearstream Luxembourg and Euroclear and the Depositary may be effected in accordance
with procedures established for this purpose by Clearstream Luxembourg, Euroclear and the Depositary.
Global clearance and settlement procedures
Initial settlement for the notes will be made in immediately available funds. Secondary market trading between Depositary Participants will occur in the
ordinary way in accordance with the Depositary's rules and will be settled in immediately available funds using the Depositary's Same-Day Funds Settlement System. Secondary market trading between
Clearstream Luxembourg participants and Euroclear participants will occur in the ordinary way in accordance with the applicable rules and operating procedures of Clearstream Luxembourg and Euroclear
and will be settled using the procedures applicable to conventional eurobonds in immediately available funds.
Cross-market
transfers between persons holding directly or indirectly through the Depositary, on the one hand, and directly or indirectly through Clearstream Luxembourg or Euroclear participants, on
the other, will be effected through the Depositary in accordance with the Depositary's rules on behalf of the relevant European international clearing system by its U.S. Depositary; however, such
cross-market transactions will require delivery of instructions to the relevant European international clearing system by the counterparty in such system in accordance with its rules and procedures
and within its established deadlines (European time).
The
relevant European international clearing system will, if the transaction meets its settlement requirements, deliver instructions to its U.S. Depositary to take action to effect final settlement on
its behalf by delivering or receiving the notes in the Depositary, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to the Depositary.
Clearstream Luxembourg participants and Euroclear participants may not deliver instructions directly to their respective U.S. Depositaries.
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Because
of time-zone differences, credits of the notes received in Clearstream Luxembourg or Euroclear as a result of a transaction with a Depositary Participant will be made during subsequent
securities settlement processing and dated the business day following the Depositary settlement date. Such credits, or any transactions in the notes settled during such processing, will be reported to
the relevant Euroclear participants or Clearstream Luxembourg participants on that business day. Cash received in Clearstream Luxembourg or Euroclear as a result of sales of notes by or through a
Clearstream Luxembourg participant or a Euroclear
participant to a Depositary Participant will be received with value on the business day of settlement in the Depositary but will be available in the relevant Clearstream Luxembourg or Euroclear cash
account only as of the business day following settlement in the Depositary.
Although
the Depositary, Clearstream Luxembourg and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of securities among participants of the Depositary, Clearstream
Luxembourg and Euroclear, they are under no obligation to perform or continue to perform such procedures and they may discontinue the procedures at any time.
Certain definitions
The following definitions are applicable to the indenture:
"Indebtedness"
of any person means, without duplication, (i) any obligation of such person for money borrowed and (ii) any obligation of such person evidenced by bonds, debentures, notes
or other similar instruments.
"Lien"
means any pledge, mortgage, lien, encumbrance or other security interest.
"Restricted
Subsidiary" means a subsidiary of ours (other than a Securitization entity) (i) which is owned, directly or indirectly, by us or by one or more of our subsidiaries, or by us and one
or more of our subsidiaries, (ii) which is incorporated under the laws of the United States or a state thereof, (iii) which owns a Principal Property and (iv) a majority of the
voting stock of which is not owned by us, directly or indirectly, through one or more entities that are not incorporated under the laws of the United States or a state thereof.
"Principal
property" has the meaning defined under "Limitations on sale and leaseback transactions" above.
"Securitization
entity" means any Subsidiary or other person that is engaged solely in the business of effecting asset securitization transactions and related activities.
"Subsidiary"
of any person means (i) a corporation a majority of the outstanding voting stock of which is at the time, directly or indirectly, owned by such person, by one or more Subsidiaries
of such person, or by such person and one or more Subsidiaries thereof or (ii) any other person (other than a corporation), including, without limitation, a partnership or joint venture, in
which such person, one or more Subsidiaries thereof, or such person and one or more Subsidiaries thereof, directly or indirectly, at the date of determination thereof, has at least majority ownership
interest entitled to vote in the election of directors, managers or trustees thereof (or other persons performing similar functions).
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Material United States federal income tax considerations
The following is a general discussion of material United States federal income tax consequences of the ownership and disposition of the notes.
This discussion applies only to a United States Holder or a Non-United States Holder (each as defined below) that acquires the notes pursuant to this offering at the initial offering price. This
discussion is based upon the United States Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations, judicial decisions and administrative interpretations thereof, all as of the
date hereof and all of which are subject to change, possibly with retroactive effect. The tax considerations contained in this discussion may be challenged by the IRS, and we have not requested, and
do not plan to request, any rulings from the IRS concerning the notes. This
discussion is limited to investors that hold the notes as capital assets for United States federal income tax purposes. Furthermore, this discussion does not address all aspects of United States
federal income taxation that may be applicable to investors in light of their particular circumstances, or to investors subject to special treatment under United States federal income tax law, such
as, without limitation, banks and other financial institutions, insurance companies, regulated investment companies, real estate investment trusts, tax-exempt organizations, retirement plans and other
tax-deferred accounts, United States Holders whose functional currency for tax purposes is not the U.S. dollar, entities that are treated as partnerships for United States federal income tax purposes,
dealers or traders in securities or currencies, certain former citizens or residents of the United States subject to Section 877 of the Code, taxpayers subject to the alternative minimum tax
and persons that hold the notes as part of a straddle, hedge, conversion transaction or other integrated investment. Furthermore, this discussion does not address any United States federal estate or
gift tax consequences, consequences of the Medicare tax on net investment income or any state, local or non-United States tax consequences.
If
a partnership (including any entity or arrangement treated as a partnership for United States federal income tax purposes) owns notes, the tax treatment of a partner in the partnership will depend
upon the status of the partner and the activities of the partner and the partnership. Partners in a partnership that owns the notes should consult their tax advisors as to the particular United States
federal income tax consequences applicable to them.
The
following discussion is for informational purposes only and is not a substitute for careful tax planning and advice. Investors considering the purchase of notes should consult their own tax
advisors with respect to the application of the United States federal income tax laws to their particular situations, as well as any tax consequences arising under the estate or gift tax laws or the
laws of any state, local or non-United States taxing jurisdiction, or under any applicable tax treaty.
Additional payments
We may be obligated to pay amounts in excess of the stated interest or principal on the notes, including as described under "Description of
notesOptional redemption" and "Repurchase at the option of the holders of notes," and may be obligated to pay additional interest on the notes, as described under "Description of
notesInterest Rate Adjustment." These potential payments may implicate the provisions of Treasury Regulations relating to "contingent payment debt instruments." According to the
applicable Treasury Regulations, certain contingencies will
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not
cause a debt instrument to be treated as a contingent payment debt instrument if such contingencies in the aggregate, as of the date of issuance, are remote or incidental or, in certain
circumstances, if it is "significantly more likely than not" that none of such contingencies will occur. We intend to take the position that the foregoing contingencies will not cause the notes to be
treated as "contingent payment debt instruments." Our position is binding on an investor unless such investor discloses its contrary position in the manner required by applicable Treasury Regulations.
However, our determination concerning the effect of these contingencies is inherently factual, and our position is not binding on the IRS. If the IRS were to successfully challenge this position, an
investor might be required to accrue interest income at a higher rate than the stated interest rate on the notes, and to treat any gain realized on the taxable disposition of a note as ordinary
interest income, rather than capital gain. The remainder of this discussion assumes that the notes will not be treated as "contingent payment debt instruments." Investors should consult their own tax
advisors regarding the possible application of the contingent payment debt instrument rules to the notes.
United States holders
The following is a summary of material United States federal income tax considerations if you are a United States Holder. For purposes of this
summary, the term "United States Holder" means a beneficial owner of a note that is, for United States federal income tax purposes:
-
-
an individual who is a citizen or a resident of the United States;
-
-
a corporation (or any other entity or arrangement taxable as a corporation for United States federal income tax purposes) created or organized
under the laws of the United States or any state thereof or the District of Columbia;
-
-
an estate, the income of which is subject to United States federal income taxation regardless of its source; or
-
-
a trust, if (i) a court within the United States is able to exercise primary jurisdiction over its administration and one or more United
States persons have the authority to control all of its substantial decisions, or (ii) in the case of a trust that was treated as a domestic trust under the law in effect before 1997, a valid
election is in place under applicable Treasury regulations to treat such trust as a domestic trust.
Payment of stated interest
Subject to the discussion above under "Additional payments," stated interest on a note will be included in the gross income of a
United States Holder as ordinary income at the time that such interest is accrued or received, in accordance with the holder's method of accounting for United States federal income tax purposes.
Sale, exchange, redemption, retirement or other taxable disposition of notes
Upon the sale, exchange, redemption, retirement or other taxable disposition of a note, a United States Holder generally will recognize gain
or loss equal to the difference between (i) the amount realized upon the disposition and (ii) the holder's adjusted tax basis in the note. The amount realized will be equal to the sum of
the amount of cash and the fair market value
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of
any property received in exchange for the note less any portion allocable to any accrued and unpaid interest, which will be taxed as ordinary interest income (as described above under
"Payment of Stated Interest") to the extent not previously so taxed. A United States Holder's adjusted tax basis in a note generally will equal the cost of the note to such holder. This
gain or loss generally will be capital gain or loss, and will be long-term capital gain or loss if the United States Holder has held the note for more than one year. In general, long-term capital
gains of a non-corporate United States Holder are taxed at lower rates than those applicable to ordinary income. The deductibility of capital losses is subject to limitations. United States Holders
should consult their own tax advisors as to the deductibility of capital losses in their particular circumstances.
Information reporting and backup withholding
In general, we must report certain information to the IRS with respect to certain payments of principal, premium (if any) and interest on a
note, and certain payments of the proceeds of the sale or other taxable disposition (including a retirement or redemption) of a note, to certain United States Holders. The payor (which may be us or an
intermediate payor) may be required to impose backup withholding, currently at a rate of 28%, if (i) the payee fails to furnish a taxpayer identification number ("TIN") to the payor or to
otherwise establish an exemption from backup withholding; (ii) the IRS notifies the payor that the TIN furnished by the payee is incorrect; (iii) there has been a notified payee
underreporting described in section 3406(c) of the Code; or (iv) the payee has not certified under penalties of perjury that it has furnished a correct TIN and that the IRS has not
notified the payee that is subject to backup withholding under the Code. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a United
States Holder will be allowed as a credit against that holder's United States federal income tax liability and may entitle the holder to a refund, provided that the required information is timely
furnished to the IRS.
Non-United States holders
The following is a summary of material United States federal income tax considerations if you are a Non-United States Holder. For purposes of
this discussion, the term "Non-United States Holder" means a beneficial owner of a note that is, for United States federal income tax purposes:
-
-
a nonresident alien individual;
-
-
a foreign corporation; or
-
-
a foreign
estate or trust.
The
following discussion assumes that no item of income, gain, deduction or loss derived by a Non-United States Holder in respect of a note at any time is effectively connected with the conduct of a
United States trade or business. Special rules, not discussed herein, may apply to certain Non-United States Holders, such as:
-
-
controlled foreign corporations;
-
-
passive foreign investment companies;
-
-
corporations that accumulate earnings to avoid United States federal income tax;
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investors in pass-through entities that are subject to special treatment under the Code; and
-
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Non-United States Holders that are engaged in the conduct of a United States trade or business.
Stated interest
Subject to the discussions below concerning backup withholding and FATCA (as defined below), a Non-United States Holder generally will not be
subject to United States federal income or withholding tax on payments of interest on the notes provided that the Non-United States Holder (A) does not actually or constructively own 10% or
more of the total combined voting power of all classes of our voting stock, (B) is not a controlled foreign corporation related to us directly or constructively through stock ownership and
(C) satisfies certain certification requirements. Such certification requirements will generally be met if (x) the Non-United States Holder provides its name and address, and certifies
on IRS Form W-8BEN or W-8BEN-E (or a substantially similar form), under penalties of perjury, that it is not a United States person or (y) a securities clearing organization or one of
certain other financial institutions holding the note on behalf of the Non-United States Holder certifies on IRS Form W-8IMY, under penalties of perjury, that such certification from the
Non-United States Holder has been received by it and furnishes us or our paying agent with a copy thereof. In addition, we or our paying agent must not have actual knowledge or reason to know that the
beneficial owner of the note is a United States person.
If
a Non-United States Holder cannot satisfy the requirements outlined above, then interest on the notes will generally be subject to United States withholding tax at a 30% rate (or a lower applicable
treaty rate).
Disposition of the notes
Subject to the discussions below concerning backup withholding and FATCA (as defined below), a Non-United States Holder will not be subject to
United States federal income tax with respect to gain recognized on the disposition of the notes unless the Non-United States Holder is an individual who is present in the United States for 183 or
more days in the taxable year of the disposition and certain other conditions are satisfied. In such case, the Non-United States Holder will be subject to a flat 30% tax (or lower applicable treaty
rate) on any capital gain recognized on the disposition of the notes, which may be offset by certain United States-source capital losses.
Information reporting and backup withholding
We must report annually to the IRS and to a Non-United States Holder the amount of interest paid to the Non-United States Holder and the
amount of tax, if any, withheld with respect to such interest. Unless the Non-United States Holder complies with certification procedures to establish that the Non-United States Holder is not a United
States person, information returns may also be filed with the IRS in connection with the proceeds from a sale or other disposition of a note. The IRS may make this information available to the tax
authorities in the country in which the Non-United States Holder is a resident.
In
addition, a Non-United States Holder may be subject to backup withholding with respect to interest payments on a note or the proceeds from disposition of a note, unless, generally, the
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Non-United
States Holder certifies under penalties of perjury (usually on IRS Form W-8BEN or W-8BEN-E) that the Non-United States Holder is not a United States person or the Non-United States
Holder otherwise establishes an exemption.
Additional
rules relating to information reporting requirements and backup withholding with respect to the payment of proceeds from the disposition of a note are as follows:
-
-
If the proceeds are paid to or through the United States office of a broker, a Non-United States Holder generally will be subject to backup
withholding and information reporting unless the Non-United States Holder certifies under penalties of perjury that it is not a United States person (usually on an IRS Form W-8BEN or W-8BEN-E)
or otherwise establishes an exemption.
-
-
If the proceeds are paid to or through a non-United States office of a broker that is not a United States person and does not have one of
certain specified United States connections, a Non-United States Holder generally will not be subject to backup withholding or information reporting.
-
-
If the proceeds are paid to or through a non-United States office of a broker that is a United States person or that has one of the specified
United States connections, a Non-United States Holder generally will be subject to information reporting (but generally not backup withholding) unless the Non-United States Holder certifies under
penalties of perjury that it is not a United States person (usually on an IRS Form W-8BEN or W-8BEN-E) or otherwise establishes an exemption.
Any
amounts withheld under the backup withholding rules will be allowed as a credit against the Non-United States Holder's United States federal income tax liability and may entitle such
Non-United States Holder to a refund, provided the required information is timely furnished to the IRS.
Foreign account tax compliance act
Sections 1471 through 1474 of the Code and the Treasury Regulations promulgated thereunder ("FATCA") generally impose a withholding tax
of 30% on interest income paid on a debt obligation and on the gross proceeds from the sale or other disposition of a debt obligation paid to (i) a foreign financial institution (as the
beneficial owner or as an intermediary for the beneficial owner), unless such institution enters into an agreement with the United States government to collect and provide to the United States tax
authorities substantial information regarding United States account holders of such institution (which would include certain equity and debt holders of such institution, as well as certain account
holders that are foreign entities with United States owners) or (ii) a foreign entity that is not a financial institution (as the beneficial owner or as an intermediary for the beneficial
owner), unless such entity provides the withholding agent with a certification identifying the substantial United States owners of the entity, which generally includes any United States person who
directly or indirectly owns more than 10% of the entity. Under applicable Treasury Regulations, this withholding tax will not apply to gross proceeds from the sale or other disposition of a debt
obligation paid on or before December 31, 2018. Intergovernmental agreements between the United States and other jurisdictions may modify the above rules. Investors are encouraged to consult
with their own tax advisors regarding the implications of FATCA with respect to their investment in a note.
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