Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On March 16, 2020, Martin Marietta Materials, Inc. (“Martin Marietta”) issued $500 million aggregate principal amount of 2.500% Senior Notes due 2030
(the “Senior Notes”) pursuant to a base indenture, dated as of May 22, 2017 (the “Base Indenture”), as amended and supplemented from time to time, including by the Third Supplemental Indenture, dated as of March 16, 2020 (the “Third Supplemental
Indenture” and, together with the Base Indenture, the “Indenture”) between Martin Marietta and Regions Bank, as trustee (the “Trustee”), governing the Senior Notes.
The Senior Notes will mature on March 15, 2030 and will have an interest rate of 2.500%. Interest will be paid semiannually on the 15th day of March and
September, commencing September 15, 2020.
The Senior Notes are Martin Marietta’s senior unsecured obligations and rank equally in right of payment with all of its existing and future senior
indebtedness and will rank senior in right of payment to all of its future subordinated indebtedness. The Senior Notes are effectively subordinated to all of its existing and future secured indebtedness to the extent of the value of the assets
securing such indebtedness. The Senior Notes are not guaranteed by any of Martin Marietta’s subsidiaries and are structurally subordinated to all of the existing and future indebtedness and other liabilities (including trade accounts payable) and
preferred equity of Martin Marietta’s subsidiaries.
The net proceeds of the offering are expected to be used for general corporate purposes, which will include, among other uses, repayment at maturity of
approximately $300 million aggregate principal amount of Martin Marietta’s existing floating rate notes due 2020.
Optional Redemption. Prior to December 15, 2029 (the “Par Call Date”), Martin Marietta may redeem the Senior Notes, at its option, at any time in whole or from time to time in part at a price equal to the greater
of: (i) 100% of the principal amount of the Senior Notes to be redeemed and (ii) the sum of the present values of the principal amount of the Senior Notes to be redeemed and the remaining scheduled payments of interest thereon after the date of
optional redemption (an “Optional Redemption Date”) through the Par Call Date (assuming, for this purpose, that the Senior Notes are scheduled to mature on the Par Call Date), excluding interest, if any, accrued thereon to such Optional Redemption
Date, discounted to such Optional Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined in the Indenture) plus 30 basis points (or 0.300%) plus unpaid interest, if any,
accrued thereon to, but excluding, such Optional Redemption Date. On or after the Par Call Date and prior to maturity, Martin Marietta may redeem the Senior Notes, at its option, at any time in whole or from time to time in part at a price equal
to 100% of the principal amount of the Senior Notes to be redeemed, plus unpaid interest, if any, accrued thereon to, but excluding, the Optional Redemption Date.
Change of Control Repurchase Event. If a Change of Control Repurchase Event (as defined in the Indenture) occurs, unless Martin Marietta has exercised its right to redeem the Senior Notes in full, Martin Marietta will be required to offer to repurchase all of the
outstanding Notes at a repurchase price equal to 101% of their principal amount, plus unpaid interest, if any, accrued thereon to, but excluding, the date of repurchase.
Other Covenants. The Indenture contains covenants that restrict Martin Marietta’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, or transfer all or substantially all of the assets of Martin Marietta and its subsidiaries, taken as a whole, to, another entity. These covenants are subject to a number of important exceptions and
qualifications, as described in the Indenture.
Events of Default. The
Indenture provides for customary events of default (subject in certain cases to customary grace and cure periods), which include non-payment, breach of covenants in the Indenture and certain events of bankruptcy and insolvency. Generally, if an
event of default occurs, the Trustee or holders of at least 25% in aggregate principal amount of the then outstanding Senior Notes may declare the principal of all such outstanding Senior Notes and any accrued interest thereon immediately due and
payable.
The Senior Notes have been registered under the Securities Act of 1933, as amended (the “Act”), pursuant to an effective shelf registration statement on
Form S-3ASR (File No. 333-217991), as supplemented by the prospectus supplement dated March 5, 2020, filed with the Securities and Exchange Commission under the Act.
The foregoing description of the Indenture (including the form of Senior Notes) does not purport to be complete and is qualified in its entirety by
reference to the full text of the Base Indenture and the Third Supplemental Indenture (including the form of Senior Notes), which are attached hereto as Exhibits 4.1, 4.2 and 4.3 and incorporated by reference herein.