Item 1.01. Entry into a Material Definitive Agreement.
On March 4, 2020, Freeport-McMoRan Inc., a Delaware corporation (FCX), as issuer, and Freeport-McMoRan Oil & Gas LLC, a Delaware limited liability company, as guarantor (Guarantor), completed the sale of its previously announced $700 million aggregate principal amount of 4.125% Senior Notes due 2028 (the 2028 Senior Notes) and $600 million aggregate principal amount of 4.250% Senior Notes due 2030 (the 2030 Senior Notes and, together with the 2028 Senior Notes, the Notes). The Notes are guaranteed by the Guarantor (the Guarantees and, together with the Notes, the Securities). The Securities are FCX and the Guarantor’s senior unsecured obligations and will rank senior in right of payment to any subordinated indebtedness that FCX or the Guarantor may incur in the future and equally in right of payment with all of the existing and future unsecured and unsubordinated indebtedness of FCX and the Guarantor.
The Securities were offered pursuant to a prospectus supplement dated February 19, 2020, to the prospectus dated August 1, 2019, that forms a part of FCX’s effective Registration Statement on Form S-3, as amended (File No. 333-226675), filed by FCX with the Securities and Exchange Commission under the Securities Act of 1933, as amended.
The Notes were issued pursuant to an Indenture dated as of August 15, 2019 (the Base Indenture), between FCX and U.S. Bank National Association, as trustee (the Trustee), as supplemented by the third supplemental indenture and the fourth supplemental indenture, each dated as of March 4, 2020, among FCX, the Guarantor and the Trustee (collectively, the Supplemental Indentures and together with the Base Indenture, the Indenture).
The 2028 Senior Notes will mature on March 1, 2028, and the 2030 Senior Notes will mature on March 1, 2030. Interest will accrue at a rate of 4.125% per annum for the 2028 Senior Notes and 4.250% per annum for the 2030 Senior Notes, in each case, from March 4, 2020. Interest on each of the 2028 Senior Notes and the 2030 Senior Notes is payable on March 1 and September 1 of each year, commencing on September 1, 2020. FCX may redeem some or all of the Notes at any time and from time to time at the redemption prices set forth in the Indenture, as applicable.
The Indenture contains covenants that restrict FCX’s ability, with certain exceptions, to (i) incur debt secured by liens, (ii) engage in sale and leaseback transactions and (iii) merge or consolidate with or into another entity, or sell, transfer or lease all or substantially all of its properties and assets. These covenants are subject to a number of important exceptions and qualifications, as described in the Indenture.
In the ordinary course of their businesses, affiliates of the Trustee have engaged in commercial banking transactions with FCX and its subsidiaries, and may in the future engage in commercial banking and other transactions with FCX and its subsidiaries.
The foregoing descriptions of the Indenture and the Securities are not intended to be complete and are qualified in their entirety by reference to the Indenture and the forms of the Notes, copies of which are attached as Exhibits 4.1, 4.2, 4.3, 4.4 and 4.5 to this Current Report on Form 8-K and each of which is incorporated by reference herein.