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Item 1.01.
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Entry into a Material Definitive Agreement.
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On July 13, 2020, Freeport-McMoRan Inc., a Delaware corporation (FCX), as issuer, and Freeport-McMoRan Oil & Gas LLC, a Delaware limited liability company (FM O&G), as guarantor, entered into an Underwriting Agreement (the Underwriting Agreement) with J.P. Morgan Securities LLC, as representative of the several underwriters named in Schedule 1 thereto (the Underwriters), pursuant to which FCX agreed to issue and sell to the Underwriters $650 million aggregate principal amount of its 4.375% Senior Notes due 2028 (the 2028 Senior Notes) and $850 million aggregate principal amount of its 4.625% Senior Notes due 2030 (the 2030 Senior Notes and, together with the 2028 Senior Notes, the Notes). The Notes have been offered pursuant to a prospectus supplement dated July 13, 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 offering is expected to close on or about July 27, 2020, subject to satisfaction of customary closing conditions. FCX intends to use the net proceeds from the offering and, if necessary, cash on hand or available liquidity to fund its concurrent cash tender offers for up to $1.5 billion aggregate purchase price of its 3.55% Senior Notes due 2022, 3.875% Senior Notes due 2023 and 4.55% Senior Notes due 2024, and the payment of accrued and unpaid interest, premiums, fees and expenses in connection therewith. Any net proceeds not used for the tender offers will be used for general corporate purposes, which may include repurchases or redemptions of FCX’s notes.
The Underwriting Agreement contains customary representations, warranties and covenants of FCX and FM O&G, conditions to closing, indemnification obligations of FCX, FM O&G and the Underwriters and termination and other customary provisions.
Certain of the Underwriters and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with FCX or its affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions. An affiliate of J.P. Morgan Securities LLC serves as administrative agent and lender for FCX’s revolving credit facility. In addition, an affiliate of J.P. Morgan Securities LLC served as joint lead arranger and joint bookrunner for FCX’s revolving credit facility. One or more of the underwriters or their affiliates may hold FCX’s 3.55% Senior Notes due 2022, 3.875% Senior Notes due 2023 and/or 4.55% Senior Notes due 2024, and tender such notes in FCX’s previously announced tender offers. As a result, one or more of the underwriters or their affiliates may receive a portion of the net proceeds from the offering of the Notes. Affiliates of certain of the underwriters are lenders under our revolving credit facility. J.P. Morgan Securities LLC, BofA Securities, Inc. and Citigroup Global Markets Inc. are acting as dealer managers in connection with FCX’s previously announced tender offers.
The foregoing description of the Underwriting Agreement is not intended to be complete and is qualified in its entirety by reference to the Underwriting Agreement, a copy of which is attached hereto as Exhibit 1.1, and is incorporated herein by reference.