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Item 1.01
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Entry into a Material Definitive Agreement.
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On July 28, 2020, in connection with the settlement of Macy’s Retail Holdings, LLC (“MRH”)’s previously announced offers to eligible holders to exchange (collectively, the “Exchange Offers”) (i) new 6.65% Senior Secured Debentures due 2024 (“New 2024 Notes”) to be issued by MRH for validly tendered (and not validly withdrawn) outstanding 6.65% Senior Debentures due 2024 issued by MRH (“Old 2024 Notes”), (ii) new 6.7% Senior Secured Debentures due 2028 (“New 2028 Notes”) to be issued by MRH for validly tendered (and not validly withdrawn) outstanding 6.7% Senior Debentures due 2028 issued by MRH (“Old 2028 Notes”), (iii) new 8.75% Senior Secured Debentures due 2029 (“New 2029 Notes”) to be issued by MRH for validly tendered (and not validly withdrawn) outstanding 8.75% Senior Debentures due 2029 issued by MRH (“Old 2029 Notes”), (iv) new 7.875% Senior Secured Debentures due 2030 (“New 2030 Notes”) to be issued by MRH for validly tendered (and not validly withdrawn) outstanding 7.875% Senior Debentures due 2030 issued by MRH (“Old 2030 Notes”), (v) new 6.9% Senior Secured Debentures due 2032 (“New 2032 Notes”) to be issued by MRH for validly tendered (and not validly withdrawn) outstanding 6.9% Senior Debentures due 2032 issued by MRH (“Old 2032 Notes”) and (vi) new 6.7% Senior Secured Debentures due 2034 (“New 2034 Notes” and, together with the New 2024 Notes, New 2028 Notes, New 2029 Notes, New 2030 Notes and New 2032 Notes, the “New Notes”) to be issued by MRH for validly tendered (and not validly withdrawn) outstanding 6.7% Senior Debentures due 2034 issued by MRH (“Old 2034 Notes” and, together with the Old 2024 Notes, Old 2028 Notes, Old 2029 Notes, Old 2030 Notes and Old 2032 Notes, the “Old Notes”), MRH issued:
(i) $80,811,000 aggregate principal amount of New 2024 Notes;
(ii) $73,892,000 aggregate principal amount of New 2028 Notes;
(iii) $13,000,000 aggregate principal amount of New 2029 Notes;
(iv) $4,686,000 aggregate principal amount of New 2030 Notes;
(iv) $5,339,000 aggregate principal amount of New 2032 Notes; and
(v) $182,698,000 aggregate principal amount of New 2034 Notes.
The New Notes were issued pursuant to an indenture, dated as of July 28, 2020 (the “New Notes Indenture”), by and among MRH, as issuer, Macy’s, Inc., as guarantor (the “Guarantor” or the “Company”), and U.S. Bank National Association, a national banking association, as trustee and collateral trustee. The New Notes are senior obligations of MRH and the Company and are or will be secured on a second-priority basis by (i) a pledge of 100% of the issued and outstanding equity interests of each subsidiary of Macy’s Propco Holdings, LLC (“Propco”) and (ii) a mortgage/deed of trust in all real property owned or to be owned by Propco and any of its subsidiaries, subject to certain exceptions and permitted liens (collectively, the “Collateral”).
The New 2024 Notes will bear interest at a rate of 6.65% per annum, payable semi-annually on January 15 and July 15, commencing on January 15, 2021. The New 2024 Notes will mature on July 15, 2024. The New 2028 Notes will bear interest at a rate of 6.7% per annum, payable semi-annually on March 15 and September 15, commencing on September 15, 2020. The New 2028 Notes will mature on September 15, 2028. The New 2029 Notes will bear interest at a rate of 8.75% per annum, payable semi-annually on May 15 and November 15, commencing on November 15, 2020. The New 2029 Notes will mature on May 15, 2029. The New 2030 Notes will bear interest at a rate of 7.875% per annum, payable semi-annually on March 1 and September 1, commencing on September 1, 2020. The New 2030 Notes will mature on March 1, 2030. The New 2032 Notes will bear interest at a rate of 6.9% per annum, payable semi-annually on January 15 and July 15, commencing on January 15, 2021. The New 2032 Notes will mature on January 15, 2032. The New 2034 Notes will bear interest at a rate of 6.7% per annum, payable semi-annually on January 15 and July 15, commencing on January 15, 2021. The New 2034 Notes will mature on July 15, 2034.
MRH may redeem some or all of the New Notes at the redemption prices and on the terms specified in the New Notes Indenture. The New Notes Indenture, among other things, limits MRH’s ability and the ability of the restricted subsidiaries to (i) grant or incur liens (ii) incur, assume or guarantee additional secured indebtedness (iii) enter into sale and lease-back transactions, (iv) sell or otherwise dispose of assets that are Collateral and (v) engage in a merger or consolidation.
The New Notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and any applicable state securities laws.
The foregoing description of the New Notes Indenture does not purport to be complete and is qualified in its entirety by reference to the New Notes Indenture, which is as attached hereto as Exhibit 4.1 and is incorporated herein by reference.