Filed Pursuant to Rule
424(b)(2)
Registration File No. 333-213943
CALCULATION OF REGISTRATION FEE
|
|
|
Proposed
|
|
|
Amount
|
Maximum
|
Maximum
|
|
Title of Each Class
of
|
to be
|
Offering Price
|
Aggregate
|
Amount of
|
Securities to be Registered
|
Registered
|
Per Unit
|
Offering Price
|
Registration
Fee(1)
|
3.600% Notes due 2022
|
$400,000,000
|
99.859%
|
$399,436,000
|
$46,294.64
|
(1)
|
|
Calculated in accordance with Rule 457(o) and
(r) under the Securities Act of 1933, as
amended.
|
PROSPECTUS
SUPPLEMENT
(To Prospectus dated October 3, 2016)
$400,000,000
3.600%
Notes due
2022
____________________
The Western Union Company is
offering
$400,000,000
aggregate
principal amount of
3.600%
Notes due 2022 (the notes). Interest on the notes will be set at a per annum
rate equal to
3.600%
. The
interest rate on the notes may be adjusted under the circumstances described in
this prospectus supplement under Description of the NotesGeneralInterest Rate
Adjustment. The Western Union Company will pay interest on the notes
on
March 15
and
September 15
of
each year,
beginning
September 15
, 2017. The
notes will mature
on
March 15, 2022
.
The Western Union Company may
redeem the notes at any time in whole or from time to time in part at the prices
specified in this prospectus supplement under the section titled Description of
the NotesOptional Redemption.
The notes will be The Western Union Companys
senior unsecured obligations and will rank equally in right of payment with its
other existing and future senior unsecured obligations. The notes will be
effectively junior to all existing and future indebtedness and other liabilities
of our subsidiaries.
The notes will not be listed
on any securities exchange or included in any automated quotation system.
Currently there is no public market for the notes.
The notes will be issued only
in denominations of $2,000 and integral multiples of $1,000 in excess
thereof.
____________________
Investing in the notes involves
risks. See the sections titled Risk Factors beginning on page S-11 of this
prospectus supplement, page 5 of the accompanying prospectus and page 22 of our
Annual Report on Form 10-K for the year ended December 31, 2016 filed with the
U.S. Securities and Exchange Commission (the SEC) for a discussion of certain
of the risks you should consider before investing in the notes.
|
Per Note
|
|
Total
|
Public offering
price
(1)
|
99.859%
|
|
$399,436,000
|
Underwriting discount
|
0.600%
|
|
$ 2,400,000
|
Proceeds, before expenses, to The Western Union
Company
|
99.259%
|
|
$397,036,000
|
____________________
(1)
|
|
Plus accrued interest
from
March 15
, 2017, if
settlement occurs after that date
, which is the fifth U.S.
business day following the date of this prospectus supplement (such settlement
being referred to as T+5).
|
Neither the SEC nor any
U.S. state securities commission has approved or disapproved of these securities
or determined if this prospectus supplement or the accompanying prospectus is
truthful or complete. Any representation to the contrary is a criminal
offense.
We expect that the notes will
be ready for delivery in book-entry form only through The Depository Trust
Company and its participants, including Clearstream Banking, S.A. and Euroclear
Bank, S.A./N.V., as operator of the Euroclear System, on or
about
March 15
,
2017.
____________________
Joint Book-Running
Managers
Barclays
|
BofA Merrill Lynch
|
Citigroup
|
|
|
Co-Managers
|
|
|
|
BNY Mellon
Capital Markets, LLC
|
|
|
|
US
Bancorp
|
CIBC
Capital Markets
|
|
Credit
Suisse
|
|
Fifth
Third Securities
|
J.P.
Morgan
|
|
|
|
Scotiabank
|
The date of this
prospectus supplement is
March 8
,
2017.
TABLE OF
CONTENTS
Prospectus
Supplement
|
Page
|
About
This Prospectus Supplement
|
S-1
|
Forward-Looking
Statements
|
S-2
|
Where
You Can Find More Information
|
S-4
|
Prospectus Supplement
Summary
|
S-5
|
Summary
of Selected Historical Financial Data
|
S-9
|
Risk Factors
|
S-11
|
Use of
Proceeds
|
S-14
|
Capitalization
|
S-15
|
Description of the Notes
|
S-17
|
Material U.S. Federal
Income Tax Considerations
|
S-29
|
Underwriting
|
S-34
|
Legal Matters
|
S-40
|
Experts
|
S-40
|
Prospectus
|
Page
|
About This Prospectus
|
1
|
Where You Can Find More Information
|
1
|
Forward-Looking Statements
|
3
|
Risk
Factors
|
5
|
The Western Union Company
|
6
|
Use
of Proceeds
|
7
|
Ratio of Earnings to Fixed Charges
|
8
|
Description of Debt Securities
|
9
|
Plan of Distribution
|
22
|
Legal Matters
|
23
|
Experts
|
23
|
ABOUT THIS PROSPECTUS
SUPPLEMENT
This document is in two parts.
The first part is this prospectus supplement, which describes the terms of the
offering of the notes. The second part is the accompanying prospectus dated
October 3, 2016, to which we refer as the accompanying prospectus. The
accompanying prospectus contains a description of certain terms of the debt
securities we may issue, including the notes, and gives more general
information, some of which may not apply to the notes. To the extent the
information contained in this prospectus supplement differs or varies from the
information contained in the accompanying prospectus or the documents
incorporated by reference into the prospectus supplement or the accompanying
prospectus, the information in this prospectus supplement controls.
We have not, and the
underwriters have not, authorized anyone to provide you with any information
other than, and you should rely only on, the information contained or
incorporated by reference in this prospectus supplement and the accompanying
prospectus and in any free writing prospectus we authorize that supplements this
prospectus supplement and the other information to which we have referred you.
We take no responsibility for, and can provide no assurance as to the
reliability of, any other information that others may provide you. We are not,
and the underwriters are not, making an offer to sell the notes in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this prospectus supplement, the accompanying
prospectus and the documents incorporated by reference herein and therein, and
any free writing prospectus we authorize, is accurate only as of the respective
dates of those documents. Our business, financial condition, results of
operations and prospects may have changed materially since those
dates.
Before you invest in the
notes, you should carefully read the registration statement (including the
exhibits thereto) of which the accompanying prospectus form a part, this
prospectus supplement, the accompanying prospectus and the documents
incorporated by reference into this prospectus supplement and the accompanying
prospectus. The incorporated documents are described under Where You Can Find
More Information.
As used in this prospectus supplement, the terms Western
Union, the Company, we, us and our refer to The Western Union Company
and its consolidated subsidiaries, unless the context requires
otherwise.
S-1
FORWARD-LOOKING
STATEMENTS
This prospectus supplement,
the accompanying prospectus and the materials we have filed or will file with
the SEC (as well as information included in our other written or oral
statements) contain or will contain certain statements that are forward-looking
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements are not guarantees of future performance and involve certain
risks, uncertainties and assumptions that are difficult to predict. Actual
outcomes and results may differ materially from those expressed in, or implied
by, our forward-looking statements. Words such as expects, intends,
anticipates, believes, estimates, guides, provides guidance, provides
outlook and other similar expressions or future or conditional verbs such as
may, will, should, would, could, and might are intended to identify
such forward-looking statements. Readers should not rely solely on the
forward-looking statements and should consider all uncertainties and risks
discussed in the Risk Factors sections and elsewhere in this prospectus
supplement and in our Annual Report on Form 10-K for the year ended December 31,
2016, which is incorporated by reference herein. The statements are only as of
the date they are made, and we undertake no obligation to update any
forward-looking statement.
Possible events or factors
that could cause results or performance to differ materially from those
expressed in our forward-looking statements include the following: (i) events
related to our business and industry, such as: changes in general economic
conditions and economic conditions in the regions and industries in which we
operate, including global economic and trade downturns, or significantly slower
growth or declines in the money transfer, payment service and other markets in
which we operate, including downturns or declines related to interruptions in
migration patterns, or non-performance by our banks, lenders, insurers or other
financial services providers; failure to compete effectively in the money
transfer and payment service industry, including among other things, with
respect to price, with global and niche or corridor money transfer providers,
banks and other money transfer and payment service providers, including
electronic, mobile and Internet-based services, card associations and card-based
payment providers, and with digital currencies and related protocols, and other
innovations in technology and business models; political conditions and related
actions in the United States and abroad which may adversely affect our business
and economic conditions as a whole, including interruptions of United States or
other government relations with countries in which we have or are implementing
significant business relationships with agents or clients; deterioration in
customer confidence in our business, or in money transfer and payment service
providers generally; our ability to adopt new technology and develop and gain
market acceptance of new and enhanced services in response to changing industry
and consumer needs or trends; changes in, and failure to manage effectively,
exposure to foreign exchange rates, including the impact of the regulation of
foreign exchange spreads on money transfers and payment transactions; any
material breach of security, including cybersecurity, or safeguards of or
interruptions in any of our systems or those of our vendors or other third
parties; cessation of or defects in various services provided to us by
third-party vendors; mergers, acquisitions and integration of acquired
businesses and technologies into our Company, and the failure to realize
anticipated financial benefits from these acquisitions, and events requiring us
to write down our goodwill; failure to manage credit and fraud risks presented
by our agents, clients and consumers; failure to maintain our agent network and
business relationships under terms consistent with or more advantageous to us
than those currently in place, including due to increased costs or loss of
business as a result of increased compliance requirements or difficulty for us,
our agents or their subagents in establishing or maintaining relationships with
banks needed to conduct our services; decisions to change our business mix;
changes in tax laws, or their interpretation, and unfavorable resolution of tax
contingencies; adverse rating actions by credit rating agencies; our ability to
realize the anticipated benefits from business transformation, productivity and
cost-savings and other related initiatives, which may include decisions to
downsize or to transition operating activities from one location to another, and
to minimize any disruptions in our workforce that may result from those
initiatives; our ability to protect our brands and our other intellectual
property rights and to defend ourselves against potential intellectual property
infringement claims; our ability to attract and retain qualified key employees
and to manage our workforce successfully; material changes in the market value
or liquidity of securities that we hold; restrictions imposed by our debt
obligations; (ii) events related to our regulatory and litigation environment,
such as: liabilities or loss of business resulting from a failure by us, our
agents or their subagents to comply with laws and regulations
S-2
and regulatory or judicial
interpretations thereof, including laws and regulations designed to protect
consumers, or detect and prevent money laundering, terrorist financing, fraud
and other illicit activity; increased costs or loss of business due to
regulatory initiatives and changes in laws, regulations and industry practices
and standards, including changes in interpretations in the United States, the
European Union and globally, affecting us, our agents or their subagents, or the
banks with which we or our agents maintain bank accounts needed to provide our
services, including related to anti-money laundering regulations, anti-fraud
measures, our licensing arrangements, customer due diligence, agent and subagent
due diligence, registration and monitoring requirements, consumer protection
requirements, remittances and immigration; liabilities, increased costs or loss
of business and unanticipated developments resulting from governmental
investigations and consent agreements with or enforcement actions by regulators,
including those associated with compliance with or failure to comply with the
settlement agreement with the State of Arizona, as amended, or with the
settlement agreements with the United States Department of Justice, certain
United States Attorneys Offices, the United States Federal Trade Commission,
the Financial Crimes Enforcement Network of the United States Department of
Treasury, and various state attorneys general; the impact on our business from
the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as
regulations issued pursuant to it and the actions of the Consumer Financial
Protection Bureau and similar legislation and regulations enacted by other
governmental authorities related to consumer protection; liabilities resulting
from litigation, including class-action lawsuits and similar matters, and
regulatory actions, including costs, expenses, settlements and judgments;
failure to comply with regulations and evolving industry standards regarding
consumer privacy and data use and security; effects of unclaimed property laws;
failure to maintain sufficient amounts or types of regulatory capital or other
restrictions on the use of our working capital to meet the changing requirements
of our regulators worldwide; changes in accounting standards, rules and
interpretations or industry standards affecting our business; and (iii) other
events, such as: adverse tax consequences from our spin-off from First Data
Corporation; catastrophic events; and managements ability to identify and
manage these and other risks.
S-3
WHERE YOU CAN FIND MORE
INFORMATION
We file annual, quarterly and
current reports, proxy statements and other information with the SEC. The SEC
allows us to incorporate by reference into this prospectus supplement the
information we file with the SEC, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this prospectus
supplement, and information that we file later with the SEC will automatically
update and supersede this information. SEC rules and regulations also permit us
to furnish rather than file certain reports and information with the SEC.
Any such reports or information that we furnish to the SEC shall not be deemed
to be incorporated by reference into or otherwise become a part of this
prospectus supplement, regardless of when furnished to the SEC. We incorporate
by reference the following documents we filed with the SEC (file number
001-32903) and any future filings that we make with the SEC under Sections
13(a), 13(c), 14 or 15(d) of the U.S. Securities Exchange Act of 1934, as
amended (the Exchange Act), until the offering of the notes under this
prospectus supplement is complete:
●
|
Annual Report on Form 10-K for
the year ended December 31, 2016; and
|
|
|
●
|
Current Report on Form 8-K filed with the
SEC on January 20, 2017.
|
We make available free of
charge most of our SEC filings through our Internet website
(www.westernunion.com) as soon as reasonably practicable after they are filed
with the SEC. You may access these SEC filings on the Investor Relations
section of our website. You may also request a copy of our SEC filings at no
cost, by writing or telephoning us at:
The Western Union
Company
12500 East Belford Avenue
Englewood, Colorado 80112
Attention:
Investor Relations
Telephone (866) 405-5012
Our SEC filings are also
available at the SECs website at www.sec.gov. Any information on our website or
the SECs website (other than the documents listed above) is not a part of this
prospectus supplement. You may also read and copy any documents that we file
with the SEC at the SECs public reference room at 100 F Street, N.E.,
Washington, D.C. 20549. You can request copies of these documents by writing to
the SEC and paying a fee for the copying cost. Please call the SEC at
1-800-SEC-0330 for more information about the operation of the public reference
room.
S-4
PROSPECTUS SUPPLEMENT
SUMMARY
This summary highlights
selected information contained elsewhere in, or incorporated by reference into,
this prospectus supplement and the accompanying prospectus and does not contain
all of the information that you should consider in making your investment
decision. You should read this summary together with the more detailed
information appearing elsewhere in this prospectus supplement, as well as with
the information in the accompanying prospectus and in the documents incorporated
by reference or deemed incorporated by reference into this prospectus supplement
or the accompanying prospectus. You should carefully consider, among other
things, the matters discussed in the Risk Factors and Forward-Looking
Statements sections and elsewhere in this prospectus supplement and the
accompanying prospectus and in our Annual Report on Form 10-K for the year ended
December 31, 2016, which is incorporated by reference herein. In addition, this
prospectus supplement and the accompanying prospectus include or incorporate by
reference forward-looking information that involves risks and uncertainties,
which should be read with the cautionary statements and important factors
included under Forward-Looking Statements above.
Our
Company
The Western Union Company is a
leader in global money movement and payment services, providing people and
businesses with fast, reliable and convenient ways to send money and make
payments around the world. The Western Union
®
brand is globally recognized. As of December
31,2016, our services were primarily available through a global network of over
550,000 agent locations in more than 200 countries and territories, with
approximately 90% of those locations outside of the United States. Each location
in our agent network is capable of providing one or more of our services, with
the majority offering a Western Union branded service.
Our business consists of the
following segments:
●
|
Consumer-to-ConsumerThe
Consumer-to-Consumer operating segment facilitates money transfers between
two consumers, primarily through a network of third-party agents. Our
multi-currency, real-time money transfer service is viewed by us as one
interconnected global network where a money transfer can be sent from one
location to another, around the world. Our money transfer services are
available for international cross-border transfers that is, the transfer
of funds from one country to another and, in certain countries,
intra-country transfers that is, money transfers from one location to
another in the same country. This segment also includes money transfer
transactions that can be initiated through websites and mobile
devices.
|
●
|
Consumer-to-BusinessThe
Consumer-to-Business operating segment facilitates bill payments from
consumers to businesses and other organizations, including utilities, auto
finance companies, mortgage servicers, financial service providers and
government agencies. The significant majority of the segments revenue was
generated in the United States in the year ended December 31, 2016, with
the remainder primarily generated in
Argentina.
|
●
|
Business SolutionsThe
Business Solutions operating segment facilitates payment and foreign
exchange solutions, primarily cross-border, cross-currency transactions,
for small and medium size enterprises and other organizations and
individuals. The majority of the segments business relates to exchanges
of currency at spot rates, which enable customers to make cross-currency
payments. In addition, in certain countries, we write foreign currency
forward and option contracts for customers to facilitate future
payments.
|
All businesses that have not
been classified in the above segments are reported as Other and include our
money order and other services, in addition to costs for the review and closing
of acquisitions.
S-5
We believe that brand
strength, size and reach of our global network, convenience, reliability, and
value for the price paid have been important to the growth of our business. As
we continue to seek to meet the needs of our customers for fast, reliable and
convenient global money movement and payment services, we are also working to
enhance our services, with a continued focus on regulatory compliance, and
provide consumers and our business clients with access to an expanding portfolio
of payment and other financial services and to expand the ways our services can
be accessed.
Our principal executive
offices are located at 12500 East Belford Avenue, Englewood, Colorado 80112 and
our telephone number is (866) 405-5012.
Recent
Developments
On January 19, 2017, Western
Union announced that it, or its subsidiary Western Union Financial Services,
Inc., had entered into (1) a Deferred Prosecution Agreement (the DPA) with the
United States Department of Justice (the DOJ) and certain United States
Attorneys Offices; (2) a Stipulated Order for Permanent Injunction and Final
Judgment (the Consent Order) with the United States Federal Trade Commission
(the FTC); and (3) a Consent to the Assessment of Civil Money Penalty with the
Financial Crimes Enforcement Network (FinCEN) of the United States Department
of Treasury (the FinCEN Agreement), to resolve the respective investigations
of those agencies. On January 31, 2017, Western Union entered into an assurance
of discontinuance/assurance of voluntary compliance (the State AG Agreement)
with the attorneys general of 49 U.S. states and the District of Columbia named
therein (the State Attorneys General) to resolve the State Attorneys General
investigations. As previously disclosed in the Companys filings with the SEC,
the investigations by the DOJ and FTC focused primarily on the Companys
oversight of certain agents and whether its anti-fraud program, as well as its
anti-money laundering controls, adequately prevented misconduct by those agents
and third parties. The investigation by FinCEN regarded possible violations of
the United States Bank Secrecy Act. The DPA, Consent Order, FinCEN Agreement and
State AG Agreement are collectively referred to herein as the Joint Settlement
Agreements.
Under the Joint Settlement
Agreements, the Company is required, among other things, to (1) pay an aggregate
amount of $586 million to the DOJ to be used to reimburse consumers who were the
victims of third-party fraud conducted through the Companys money transfer
services (the Compensation Payment), (2) pay an aggregate amount of $5 million
to the State Attorneys General to reimburse investigative, enforcement and other
costs and (3) retain an independent compliance auditor for three years to review
and assess actions taken by the Company under the Consent Order to further
enhance its oversight of agents and protection of consumers. The FinCEN
Agreement also sets forth a civil penalty of $184 million, the full amount of
which is deemed satisfied by the Compensation Payment, without any additional
payment or non-monetary obligations. No separate payment to the FTC is required
under the Joint Settlement Agreements.
Please refer to our Annual
Report on Form 10-K for the year ended December 31, 2016 for further information
regarding the investigations and the Joint Settlement Agreements.
S-6
The
Offering
The following summary contains
basic information about the notes. It does not contain all the information that
is important to you. For a more complete understanding of the notes, please
refer to the section of this prospectus supplement titled Description of the
Notes and the section of the accompanying prospectus titled Description of
Debt Securities.
Issuer
|
The Western Union
Company.
|
|
|
Notes Offered
|
$400,000,000
aggregate
principal amount
of
3.600%
Notes due
2022.
|
|
|
Maturity
|
March 15, 2022.
|
|
|
Interest Payment Dates
|
March 15
and
September 15
of each year,
beginning
September 15
, 2017.
|
|
|
Interest Rate Adjustment
|
The interest rate
payable on the notes will be subject to adjustments from time to time if
Moodys Investors Service, Inc. or Standard & Poors Ratings Services
downgrades (or if either subsequently upgrades) the debt rating assigned
to the notes as described under Description of the NotesGeneralInterest
Rate Adjustment.
|
|
|
Ranking
|
The notes will be The
Western Union Companys senior unsecured obligations. They will rank
equally in right of payment with our existing and future senior unsecured
obligations and will be senior in right of payment to any of our existing
and future subordinated indebtedness. The notes will be effectively junior
to all existing and future indebtedness and other liabilities of our
subsidiaries.
|
|
|
Optional Redemption
|
We may redeem the notes
at any time in whole or from time to time in part at the prices specified
in this prospectus supplement under Description of the NotesOptional
Redemption.
|
|
|
Change of Control Offer to
Repurchase
|
If we experience a
Change of Control Triggering Event, as described in this prospectus
supplement, each holder of the notes may require us to repurchase some or
all of its notes at a price equal to 101% of the principal amount of its
notes, plus accrued and unpaid interest to, but not including, the
repurchase date, if any, as described more fully under Description of the
NotesChange of Control.
|
|
|
Sinking Fund
|
None.
|
|
|
Use of Proceeds
|
We estimate the net
proceeds to us from the sale of the notes will be approximately
$396.1 million
, after
deducting the underwriting discount and other expenses of the offering
payable by us. We intend to use the net proceeds from the sale of the
notes for general corporate purposes, including to fund a portion of the
payments due under the Joint Settlement
Agreements.
|
S-7
Risk
Factors
|
Investing in the notes
involves risks. See Risk Factors beginning on page S-11 of this
prospectus supplement, page 5 of the accompanying prospectus and page 22
of our Annual Report on Form 10-K for the year ended December 31, 2016
filed with the SEC for a discussion of certain of the risks you should
consider before investing in the notes.
|
|
|
Denominations
|
The notes will be issued
only in denominations of $2,000 and integral multiples of $1,000 in excess
thereof.
|
|
|
Form
|
We will issue the notes
in the form of one or more fully registered global notes registered in the
name of the nominee of The Depository Trust Company (DTC). Beneficial
interests in the notes will be represented through book-entry accounts of
financial institutions acting on behalf of beneficial owners as direct and
indirect participants in DTC. Clearstream Banking, S.A. (Clearstream)
and Euroclear Bank, S.A./N.V., as operator of the Euroclear System
(Euroclear), will hold interests on behalf of their participants through
their respective U.S. depositaries, which in turn will hold such interests
in accounts as participants of DTC. Except in the limited circumstances
described in this prospectus supplement, owners of beneficial interests in
the notes will not be entitled to have notes registered in their names,
will not receive or be entitled to receive notes in definitive form and
will not be considered holders of notes under the
indenture.
|
|
|
Additional Notes
|
The indenture governing
the notes does not, and the notes will not, limit the aggregate principal
amount of notes or other debt securities or other debt that we or our
subsidiaries may issue. We may issue from time to time other series of
debt securities, but such series will be separate from the notes. In
addition, we may issue additional notes of the same series as the notes
without the consent of, or notice to, the holders of the outstanding
notes.
|
|
|
Listing
|
The notes will not be
listed on any securities exchange or included in any automated quotation
system.
|
|
|
Trustee
|
Wells Fargo Bank,
National Association.
|
S-8
SUMMARY OF SELECTED
HISTORICAL FINANCIAL DATA
The following tables set forth
our summary of selected historical financial data presented on a consolidated
basis and include the accounts of Western Union and our majority-owned
subsidiaries. Our summary of selected historical financial data is not
necessarily indicative of our future financial condition, future results of
operations or future cash flows. You should read the information set forth below
in conjunction with all information included or incorporated by reference in
this prospectus supplement, including the Managements Discussion and Analysis
of Financial Condition and Results of Operations and our audited consolidated
financial statements and the notes thereto incorporated by reference from our
Annual Report on Form 10-K for the year ended December 31, 2016.
|
|
Year Ended December
31,
|
(in millions, except per share data)
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
Statements of Income Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
5,422.9
|
|
|
$
|
5,483.7
|
|
|
$
|
5,607.2
|
|
|
$
|
5,542.0
|
|
|
$
|
5,664.8
|
|
Operating expenses
(a)
|
|
|
4,939.2
|
|
|
|
4,374.3
|
|
|
|
4,466.7
|
|
|
|
4,434.6
|
|
|
|
4,334.8
|
|
Operating income
(a)
|
|
|
483.7
|
|
|
|
1,109.4
|
|
|
|
1,140.5
|
|
|
|
1,107.4
|
|
|
|
1,330.0
|
|
Interest income
(b)
|
|
|
3.5
|
|
|
|
10.9
|
|
|
|
11.5
|
|
|
|
9.4
|
|
|
|
5.5
|
|
Interest expense
(c)
|
|
|
(152.5
|
)
|
|
|
(167.9
|
)
|
|
|
(176.6
|
)
|
|
|
(195.6
|
)
|
|
|
(179.6
|
)
|
Other income/(expense), net, excluding
interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
income and interest
expense
|
|
|
7.0
|
|
|
|
(10.6
|
)
|
|
|
(7.2
|
)
|
|
|
5.7
|
|
|
|
12.9
|
|
Income before income taxes
(a)(b)(c)
|
|
|
341.7
|
|
|
|
941.8
|
|
|
|
968.2
|
|
|
|
926.9
|
|
|
|
1,168.8
|
|
Net income
(a)(b)(c)
|
|
|
253.2
|
|
|
|
837.8
|
|
|
|
852.4
|
|
|
|
798.4
|
|
|
|
1,025.9
|
|
Depreciation and amortization
|
|
|
263.2
|
|
|
|
270.2
|
|
|
|
271.9
|
|
|
|
262.8
|
|
|
|
246.1
|
|
Cash Flow Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
cash provided by operating activities
(d)
|
|
$
|
1,041.9
|
|
|
$
|
1,071.1
|
|
|
$
|
1,045.9
|
|
|
$
|
1,088.6
|
|
|
$
|
1,185.3
|
|
Capital expenditures
(e)
|
|
|
(229.8
|
)
|
|
|
(266.5
|
)
|
|
|
(179.0
|
)
|
|
|
(241.3
|
)
|
|
|
(268.2
|
)
|
Common stock repurchased
(f)
|
|
|
(501.6
|
)
|
|
|
(511.3
|
)
|
|
|
(495.4
|
)
|
|
|
(399.7
|
)
|
|
|
(766.5
|
)
|
Earnings Per Share Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
(a)(b)(c)(f)
|
|
$
|
0.52
|
|
|
$
|
1.63
|
|
|
$
|
1.60
|
|
|
$
|
1.43
|
|
|
$
|
1.70
|
|
Diluted
(a)(b)(c)(f)
|
|
$
|
0.51
|
|
|
$
|
1.62
|
|
|
$
|
1.59
|
|
|
$
|
1.43
|
|
|
$
|
1.69
|
|
Cash
dividends declared per common share
(g)
|
|
$
|
0.64
|
|
|
$
|
0.62
|
|
|
$
|
0.50
|
|
|
$
|
0.50
|
|
|
$
|
0.425
|
|
Key Indicators (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer-to-Consumer transactions
|
|
|
268.33
|
|
|
|
261.53
|
|
|
|
254.93
|
|
|
|
242.34
|
|
|
|
230.98
|
|
|
|
|
As of December
31,
|
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Settlement assets
|
|
$
|
3,749.1
|
|
|
$
|
3,308.7
|
|
|
$
|
3,313.7
|
|
|
$
|
3,270.4
|
|
|
$
|
3,114.6
|
|
Total assets
(h)
|
|
|
9,419.6
|
|
|
|
9,449.2
|
|
|
|
9,877.5
|
|
|
|
10,105.4
|
|
|
|
9,450.4
|
|
Settlement obligations
|
|
|
3,749.1
|
|
|
|
3,308.7
|
|
|
|
3,313.7
|
|
|
|
3,270.4
|
|
|
|
3,114.6
|
|
Total borrowings
(h)
|
|
|
2,786.1
|
|
|
|
3,215.9
|
|
|
|
3,707.5
|
|
|
|
4,197.1
|
|
|
|
4,013.9
|
|
Total liabilities
(h)
|
|
|
8,517.4
|
|
|
|
8,044.3
|
|
|
|
8,577.1
|
|
|
|
9,000.7
|
|
|
|
8,509.8
|
|
Total stockholders equity
|
|
|
902.2
|
|
|
|
1,404.9
|
|
|
|
1,300.4
|
|
|
|
1,104.7
|
|
|
|
940.6
|
|
____________________
(a)
|
During the year ended
December 31, 2016, operating expenses included $601.0 million of expenses
as a result of the Joint Settlement Agreements, as described above under
Recent Developments. During the year ended December 31, 2015, operating
expenses included $35.3 million of expenses as a result of a settlement
agreement reached in July 2015 between Paymap, Inc., a subsidiary of
Western Union (Paymap), and the Consumer Financial Protection Bureau
regarding Paymaps marketing of its Equity Accelerator
service.
|
(b)
|
Interest income
consists of interest earned on cash balances not required to satisfy
settlement obligations.
|
(c)
|
Interest expense
primarily relates to our outstanding
borrowings.
|
S-9
(d)
|
Net cash provided by
operating activities during the year ended December 31, 2012 was impacted
by tax payments of $92.4 million made as a result of an agreement with the
United States Internal Revenue Service resolving substantially all of the
issues related to the restructuring of our international operations in
2003.
|
(e)
|
Capital expenditures
include capitalization of contract costs, capitalization of purchased and
developed software and purchases of property and equipment.
|
(f)
|
On February 10, 2015,
the Board of Directors authorized $1.2 billion of common stock repurchases
through December 31, 2017, of which $230.5 million remained available as
of December 31, 2016. On February 9, 2017, the Board of Directors
authorized $1.2 billion of common stock repurchases through December 31,
2019. During the years ended December 31, 2016, 2015, 2014, 2013 and 2012,
we repurchased 24.8 million, 25.1 million, 29.3 million, 25.7 million and
51.0 million shares, respectively.
|
(g)
|
Our Board of
Directors declared quarterly cash dividends of $0.16 per common share in
each quarter of 2016, $0.155 in each quarter of 2015, $0.125 in each
quarter of 2014 and $0.125 in each quarter of 2013.
|
|
During 2012, the
Board of Directors declared quarterly cash dividends of $0.125 per common
share in the fourth quarter and $0.10 per common share in each of the
first three quarters.
|
(h)
|
On January 1, 2016,
the Company adopted an accounting pronouncement that requires capitalized
debt issuance costs to be presented as a reduction to the carrying value
of debt, with adoption retrospective for periods previously presented in
our Annual Reports on Form 10-K. The adoption of this standard resulted in
a reduction to the carrying value of Total assets, Total borrowings, and
Total liabilities for equivalent amounts in each applicable year.
Reductions in these balances were $9.7 million, $12.9 million, $15.9
million and $15.3 million as of December 31, 2015, 2014, 2013 and 2012,
respectively.
|
S-10
RISK
FACTORS
An investment in the notes
is subject to various risks. These risks should be considered carefully with the
information provided elsewhere and incorporated by reference in this prospectus
supplement and the accompanying prospectus before deciding to invest in the
notes, including the risk factors incorporated by reference herein from our
Annual Report on Form 10-K for the year ended December 31, 2016, as updated by
the annual, quarterly and other reports and documents that we file with the SEC
after the date of this prospectus supplement and that are incorporated by
reference herein or in the accompanying prospectus. In addition, please read the
information included or incorporated by reference under Forward-Looking
Statements in this prospectus supplement for a description of additional
uncertainties associated with our business, results of operations and financial
condition and the forward-looking statements included or incorporated by
reference in this prospectus supplement and the accompanying
prospectus.
Risks Relating to the
Notes
We are a holding company
that conducts all of our business through subsidiaries. The debt and other
liabilities of our subsidiaries will be effectively senior to the
notes.
We conduct all of our business
through our subsidiaries. Our cash flow and, consequently, our ability to pay
interest and to service our debt, including the notes, are dependent upon the
cash flow of our subsidiaries and the payment of funds to us by those
subsidiaries in the form of loans, dividends or otherwise. Our subsidiaries are
separate and distinct legal entities and will have no obligation, contingent or
otherwise, to pay any amounts due on the notes or to make cash available for
that purpose. In addition, many of our operating subsidiaries are highly
regulated and may be subject to restrictions on their ability to pay dividends
to us. These subsidiaries may use the earnings they generate, as well as their
existing assets, to fulfill any existing or future direct debt service
requirements.
The notes will be The Western
Union Companys senior unsecured obligations and will rank equally in right of
payment with all of its existing and future senior unsecured obligations. The
notes will be effectively junior to all existing and future indebtedness and
other liabilities of our subsidiaries, which means that creditors of our
subsidiaries will be paid from their assets before holders of the notes would
have any claims to those assets. As of December 31, 2016, our subsidiaries had
outstanding $162 million of total indebtedness, including letters of credit and
bank guarantees but excluding intercompany indebtedness, and may incur
additional debt in the future. See Description of the
NotesGeneralRanking.
There are no covenants
in the indenture governing the notes relating to our ability to incur future
indebtedness or pay dividends and limited restrictions on our ability to engage
in other activities, which could adversely affect our ability to pay our
obligations under the notes.
The indenture governing the
notes does not contain any financial covenants. The indenture permits us and,
with respect to the notes, our subsidiaries, to incur additional debt,
including, subject to certain requirements, secured debt. Because the notes are
unsecured, in the event of any liquidation, dissolution, reorganization,
bankruptcy or other similar proceeding regarding us, whether voluntary or
involuntary, the holders of our secured debt will be entitled to receive payment
to the extent of the assets securing that debt before we can make any payment
with respect to the notes. If any of the foregoing events occurs, we cannot
assure you that we will have sufficient assets to pay amounts due on our debt
and the notes. As a result, you may receive less than you are entitled to
receive or recover nothing if any liquidation, dissolution, reorganization,
bankruptcy or other similar proceeding occurs.
S-11
The indenture does not limit
our or our subsidiaries ability to issue or repurchase securities, pay
dividends or engage in transactions with affiliates. Our ability to use our
funds for numerous purposes may limit the funds available to pay our obligations
under the notes.
There may not be a
public market for the notes.
The notes constitute a new
issue of securities with no established trading market. We do not intend to list
the notes on any securities exchange or to include the notes in any automated
quotation system. Accordingly, no market for the notes may develop, and any
market that develops may not last. If the notes are traded, they may trade at a
discount from their offering price, depending on prevailing interest rates, the
market for similar securities, our performance and other factors. To the extent
that an active trading market does not develop, you may not be able to resell
your notes at their fair market value or at all.
The market prices of the
notes may be volatile.
The market prices of the notes
will depend on many factors, including, but not limited to, the
following:
●
|
ratings on our debt securities
assigned by rating agencies;
|
|
|
●
|
the time remaining until maturity of the notes;
|
|
|
●
|
the
prevailing interest rates being paid by other companies similar to us;
|
|
|
●
|
our
results of operations, financial condition and prospects; and
|
|
|
●
|
the condition of
the financial markets.
|
The condition of the financial
markets and prevailing interest rates have fluctuated in the past and are likely
to fluctuate in the future, which could have an adverse effect on the market
prices of the notes.
We may not be able to
repurchase the notes upon a change of control, which could result in a default
under the notes.
Unless we exercise our right
to redeem the notes, we will be required to make an offer to repurchase the
notes at a price equal to 101% of their principal amount, plus accrued and
unpaid interest, if any, to the date of repurchase upon a Change of Control
Triggering Event. A Change of Control Triggering Event will occur when (i)
there is a Change of Control involving us and (ii) among other things, within
a specified period in relation to the Change of Control, the notes are
downgraded from an investment grade rating to below an investment grade rating
by all three of the following rating agencies: Moodys Investors Service, Inc.
(Moodys) , Standard & Poors Ratings Services (S&P) and Fitch Inc.
If we experience a Change of Control Triggering Event, there can be no
assurance that we would have sufficient financial resources available to satisfy
our obligations to repurchase the notes. Our failure to purchase the notes as
required would result in a default under the notes, which could have material
adverse consequences for us and the holders of the notes. See Description of
the NotesChange of Control.
S-12
A holder may not be able
to determine when a Change of Control Triggering Event has occurred and may not
be able to require us to purchase the notes as a result of a change in the
composition of the directors on our board of directors.
The definition of Change of
Control includes a phrase relating to the direct or indirect sale, transfer,
conveyance or other disposition, in one or a series of related transactions, of
our assets and the assets of our subsidiaries substantially as an entirety or as
an entirety, taken as a whole. Although there is a limited body of case law
interpreting this phrase, there is no precise established definition of such
phrase under applicable law. Accordingly, the ability of a holder of the notes
to require us to repurchase that holders notes as a result of the sale,
transfer, conveyance or other disposition of less than all of our assets and the
assets of our subsidiaries substantially as an entirety or as an entirety, taken
as a whole, to one or more persons may be uncertain.
In addition, in interpreting a
definition of continuing directors, a Delaware Chancery Court decision found
that a board of directors may approve, for purposes of such definition, a slate
of stockholder-nominated directors without endorsing them, or while
simultaneously recommending and endorsing its own slate instead, as long as the
approval is granted in good faith and in accordance with the boards fiduciary
duties. Accordingly, a holder may not be able to require us to repurchase the
notes as a result of a change in the composition of the directors on our board
of directors unless a court were to find that such approval was not granted in
good faith or violated the boards fiduciary duties. The Delaware Chancery Court
also observed that certain provisions in indentures, such as continuing director
provisions, could function to entrench an incumbent board of directors and would
raise enforcement concerns if adopted in violation of a boards fiduciary
duties. If such a provision were found unenforceable, a holder would not be able
to require us to repurchase the notes upon a change of control resulting from a
change in the composition of our board of directors.
Our business, financial
condition and results of operations could be harmed by adverse rating actions by
credit rating agencies.
If our credit ratings are
downgraded, or if they are placed under review or continue to have a negative
outlook, our business, financial condition and results of operations could be
adversely affected and perceptions of our financial strength could be damaged,
which could adversely affect our relationships with our agents, particularly
those agents that are financial institutions or post offices. In addition, an
adverse credit rating by a rating agency, such as a downgrade or negative
outlook, could result in regulators imposing additional capital and other
requirements on us, including imposing restrictions on the ability of our
regulated subsidiaries to pay dividends. Also, a significant downgrade could
increase our costs of borrowing money, adversely affecting our business,
financial condition and results of operations.
We may redeem the notes
at our option and redemption may adversely affect your return on the
notes.
We may redeem the notes at any
time in whole or from time to time in part at the prices specified in this
prospectus supplement under Description of the NotesOptional Redemption. If
we redeem the notes at times when prevailing interest rates are relatively low,
you may not be able to reinvest the redemption proceeds in a comparable security
at an effective rate of interest as high as those of the notes.
S-13
USE OF
PROCEEDS
We estimate the net proceeds
to us from the sale of the notes will be approximately
$396.1 million
, after deducting the
underwriting discount and other expenses of the offering payable by us. We
intend to use the net proceeds from the sale of the notes for general corporate
purposes, including to fund a portion of the payments due under the Joint
Settlement Agreements.
S-14
CAPITALIZATION
The following table sets forth
our cash and cash equivalents and capitalization on a consolidated basis as of
December 31, 2016, on an actual basis and as adjusted to reflect the issuance
and sale of the notes and the use of the proceeds from this offering as set
forth under Use of Proceeds above. You should read this table in conjunction
with our Summary of Selected Historical Financial Data and our audited
consolidated financial statements and the notes thereto incorporated by
reference from our Annual Report on Form 10-K for the year ended December 31,
2016, which is incorporated by reference in this prospectus supplement and the
accompanying prospectus. See Where You Can Find More Information.
|
December 31,
2016
|
|
Actual
|
|
As
Adjusted
|
(in millions, except per share amounts)
|
|
|
|
|
(unaudited)
|
Cash and cash equivalents
|
$
|
877.5
|
|
|
$
|
1,273.6
|
(g)
|
Due in less than one year:
|
|
|
|
|
|
|
|
Commercial
paper
(a)
|
$
|
|
|
|
$
|
|
|
2.875% notes due
2017
(b)
|
|
500.0
|
|
|
|
500.0
|
|
Due in greater than one year:
|
|
|
|
|
|
|
|
3.600%
notes due
2022
offered hereby
|
|
|
|
|
|
400.0
|
|
3.650% notes due
2018
(c)
|
|
400.0
|
|
|
|
400.0
|
|
3.350% notes due
2019
(b)
|
|
250.0
|
|
|
|
250.0
|
|
5.253% notes due
2020
(b)
|
|
324.9
|
|
|
|
324.9
|
|
6.200% notes due
2036
(b)
|
|
500.0
|
|
|
|
500.0
|
|
6.200% notes due
2040
(b)
|
|
250.0
|
|
|
|
250.0
|
|
Term Loan Facility
borrowings
(d)
|
|
575.0
|
|
|
|
575.0
|
|
Total borrowings at par value
|
|
2,799.9
|
|
|
|
3,199.9
|
|
Fair value hedge
accounting adjustments, net
(e)
|
|
4.4
|
|
|
|
4.4
|
|
Unamortized discount and
debt issuance costs
|
|
(18.2
|
)
|
|
|
(22.1
|
)
|
Total borrowings at carrying value
(f)
|
$
|
2,786.1
|
|
|
$
|
3,182.2
|
|
Stockholders equity:
|
|
|
|
|
|
|
|
Preferred stock, $ 1.00
par value; no shares issued
|
|
|
|
|
|
|
|
Common stock, $ 0.01 par
value; 481.5 shares issued and outstanding
|
|
4.8
|
|
|
|
4.8
|
|
Capital surplus
|
|
640.9
|
|
|
|
640.9
|
|
Retained
earnings
|
|
419.3
|
|
|
|
419.3
|
|
Accumulated other
comprehensive loss
|
|
(162.8
|
)
|
|
|
(162.8
|
)
|
Total stockholders equity
|
|
902.2
|
|
|
|
902.2
|
|
Total capitalization
|
$
|
3,688.3
|
|
|
$
|
4,084.4
|
|
____________________
(a)
|
Pursuant to our
commercial paper program, we may issue unsecured commercial paper notes in
an amount not to exceed $1.5 billion outstanding at any time, reduced to
the extent of borrowings outstanding on our revolving credit facility in
excess of $150 million. The commercial paper notes may have maturities of
up to 397 days from the date of issuance.
|
(b)
|
The difference
between the stated interest rate and the effective interest rate is not
significant.
|
(c)
|
As of December 31,
2016, the effective rate on the 3.650% notes due 2018 was
4.4%.
|
(d)
|
As of December 31,
2016, the effective rate on the term loan facility was 2.2%. In addition
to the payment of interest, the Company is required to make certain
periodic amortization payments with respect to the outstanding principal
of the term loans commencing after the second anniversary of the closing
of the term loan facility. The final maturity date of the term loan
facility is April 11, 2021.
|
S-15
(e)
|
We utilize interest
rate swaps designated as fair value hedges to effectively change the
interest rate payments on a portion of our notes from fixed-rate payments
to short-term LIBOR-based variable rate payments in order to manage our
overall exposure to interest rates. The changes in fair value of these
interest rate swaps result in an offsetting hedge accounting adjustment
recorded to the carrying value of the related note. These hedge accounting
adjustments will be reclassified as reductions to or increases in
Interest expense in our Consolidated Statements of Income over the life
of the related notes, and cause the effective rate of interest to differ
from the notes stated rate.
|
(f)
|
As of December 31,
2016, the weighted-average effective rate on our total borrowings was
approximately 4.2%.
|
(g)
|
Pursuant to the Joint Settlement Agreements, the Company is required to pay the $586 million Compensation Payment, of which $146.5 million has been previously paid. The Company will pay the remaining $439.5 million in accordance with the terms of the Joint Settlement Agreements.
|
S-16
DESCRIPTION OF THE
NOTES
This prospectus supplement
contains a description of the material terms of the notes but does not purport
to be complete. This description of the notes supplements and, to the extent
inconsistent therewith, replaces, the section entitled Description of Debt
Securities included in the accompanying prospectus. You should read the
accompanying prospectus and this prospectus supplement together for a more
complete description of the indenture and the notes. Capitalized terms used in
this Description of the Notes have the meanings specified in the indenture and
are generally summarized in this section or under Description of Debt
SecuritiesCertain Definitions in the accompanying prospectus. References to
we, us and our in this Description of the Notes refer only to The
Western Union Company and not any of its subsidiaries.
General
Principal, Maturity and
Interest
We will issue the notes under
an indenture, dated as of November 17, 2006, between us and Wells Fargo Bank,
National Association, as trustee (the Trustee), as supplemented by a
supplemental indenture, dated as of September 6, 2007, between us and the
Trustee. We refer to the indenture, as supplemented by the supplemental
indenture, as the indenture.
We will
issue
3.600%
Notes due
2022
(the notes),
with an initial aggregate principal amount of
$400,000,000
. We may issue
additional notes from time to time after this offering. See Issuance of
Additional Notes.
The notes will be issued in
book-entry form only in denominations of $2,000 and integral multiples of $1,000
in excess thereof.
The notes will mature
on
March 15, 2022
. If the maturity
date of the notes is not a Business Day then the principal amount of such notes
plus accrued and unpaid interest thereon shall be paid on the next succeeding
Business Day with the same effect as if payment were made on the maturity date,
and no interest shall accrue for the maturity date, or thereafter.
The notes will bear interest
at a rate of
3.600%
per annum.
Interest on the notes will accrue from the issue date or from the most recent
date on which interest has been paid or provided for, payable semi-annually in
arrears to holders of record at the close of business
on
March 1
or
September 1
immediately
preceding the interest payment date on
March 15
and
September 15
of each year,
beginning
September 15
, 2017. If any
interest payment date for the notes falls on a day that is not a Business Day,
then payment for the notes will be made on the next succeeding Business Day,
without additional interest and with the same effect as if it were made on the
originally scheduled date. Interest on the notes will be computed on the basis
of a 360-day year of twelve 30-day months.
Interest Rate Adjustment
The interest rate payable on
the notes will be subject to adjustments from time to time if Moodys (or, if
applicable, any Substitute Rating Agency (as defined below)) or S&P (or, if
applicable, any Substitute Rating Agency), downgrades (or subsequently upgrades)
the debt rating assigned to the notes, as set forth below.
S-17
If the rating from Moodys or
S&P (or, in either case if applicable, any Substitute Rating Agency) with
respect to the notes (each, an Applicable Rating Agency, and collectively, the
Applicable Rating Agencies) is decreased to a rating set forth in the
immediately following table with respect to that Applicable Rating Agency, the
per annum interest rate on the notes will increase from that set forth on the
cover page of this prospectus supplement by the percentage set forth opposite
that rating:
|
|
Applicable Rating
Agency
|
|
|
Rating
Level
|
|
Moodys*
|
|
S&P*
|
|
Percentage
|
1
|
|
Ba1
|
|
BB+
|
|
0.25%
|
2
|
|
Ba2
|
|
BB
|
|
0.50%
|
3
|
|
Ba3
|
|
BB-
|
|
0.75%
|
4
|
|
B1
or below
|
|
B+
or below
|
|
1.00%
|
* Including the equivalent
ratings of any Substitute Rating Agency
If at any time the interest
rate on the notes has been adjusted upward as a result of a decrease in a rating
by an Applicable Rating Agency and that Applicable Rating Agency subsequently
increases its rating with respect to the notes to any of the threshold ratings
set forth above, the per annum interest rate on the notes will be decreased such
that the per annum interest rate equals the interest rate set forth on the cover
page of this prospectus supplement plus the percentage set forth opposite the
rating in effect immediately following the increase in the table above; provided
that if Moodys or any Substitute Rating Agency subsequently increases its
rating of the notes to Baa3 (or its equivalent if with respect to any
Substitute Rating Agency) or higher and S&P or any Substitute Rating Agency
subsequently increases its rating of the notes to BBB- (or its equivalent if
with respect to any Substitute Rating Agency) or higher, the interest rate on
the notes will be decreased to the per annum interest rate of the notes set
forth on the cover page of this prospectus supplement.
No adjustment in the interest
rate of the notes shall be made solely as a result of an Applicable Rating
Agency ceasing to provide a rating. If at any time less than two Applicable
Rating Agencies provide a rating of the notes, we will use our commercially
reasonable efforts to obtain a rating of the notes from another nationally
recognized statistical rating organization, to the extent one exists, and if
another nationally recognized statistical rating organization rates the notes
(such organization, as certified by a resolution of our board of directors, a
Substitute Rating Agency), for purposes of determining any increase or
decrease in the per annum interest rate on the notes pursuant to the table above
(a) such Substitute Rating Agency will be substituted for the last Applicable
Rating Agency to provide a rating of the notes but which has since ceased to
provide such rating, (b) the relative ratings 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 table above with respect to such Substitute Rating Agency, such ratings
shall be deemed to be the equivalent ratings used by Moodys and S&P in such
table and (c) the per annum interest rate on the notes will increase or
decrease, as the case may be, such that the interest rate equals the interest
rate set forth on the cover page of the prospectus supplement plus the
appropriate percentage, if any, set forth opposite the rating from such
Substitute Rating Agency in the table above (taking into account the provisions
of clause (b) above). For so long as (i) only one Applicable Rating Agency
provides a rating of the notes, any increase or decrease in the interest rate of
the notes necessitated by a reduction or increase in the rating by that
Applicable Rating Agency shall be twice the applicable percentage set forth in
the table above and (ii) no Applicable Rating Agency provides a rating of the
notes, the interest rate on the notes will increase to, or remain at, as the
case may be, 2.00% above the interest rate of the notes set forth on the cover
page of this prospectus supplement.
Each adjustment required by
any decrease or increase in a rating set forth above, whether occasioned by the
action of Moodys, S&P or any Substitute Rating Agency, shall be made
independent of (and in addition to) any and all other adjustments. In no event
shall (1) the per annum interest rate on the notes be reduced below
S-18
the interest rate set forth on
the cover page of this prospectus supplement or (2) the per annum interest rate
on the notes exceed a rate that is 2.00% above the interest rate of the notes
set forth on the cover page of this prospectus supplement.
Any interest rate increase or
decrease described above on the notes 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 of the notes. If Moodys or S&P (or any
Substitute Rating Agency) changes its rating of the 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 the notes described above relating to such
Applicable Rating Agencys action.
The interest rate on the notes
will permanently cease to be subject to any adjustment described above
(notwithstanding any subsequent decrease in the ratings by any Applicable Rating
Agency) if the notes become rated A3 (or its equivalent) or higher by Moodys
(or any Substitute Rating Agency) and A- (or its equivalent) or higher by
S&P (or any Substitute Rating Agency), or one of those ratings if only rated
by one Applicable Rating Agency, in each case with a stable or positive outlook.
Ranking
The notes will be our senior
unsecured obligations and rank equally in right of payment with our other
existing and future senior unsecured obligations.
We conduct all of our
operations through our subsidiaries. Our rights and the rights of our creditors,
including the holders of the notes, to participate in the distribution of assets
of any of our subsidiaries upon the liquidation or reorganization of that
subsidiary or otherwise will be subject to the prior claims of the subsidiarys
creditors, except to the extent that we may be a creditor with recognized claims
against the subsidiary. However, the notes will be obligations exclusively of
The Western Union Company and will not be guaranteed by any of our subsidiaries.
As a result, the notes will be effectively junior to all existing and future
indebtedness and other obligations of our subsidiaries, which means that
creditors of our subsidiaries will be paid from their assets before holders of
the notes would have any claims to those assets. As of December 31, 2016, our
subsidiaries had outstanding $162 million of total indebtedness, including
letters of credit and bank guarantees but excluding intercompany
indebtedness.
The indenture does not limit
the amount of debt securities or any other debt (whether secured or unsecured or
whether subordinated or unsubordinated) which we or, with respect to the notes,
our subsidiaries may incur. However, the indenture provides that neither we nor
any of our Restricted Subsidiaries (as defined under Description of Debt
SecuritiesCertain Definitions in the accompanying prospectus) may subject
certain of our property or assets to certain encumbrances unless the notes are
secured equally and ratably with or prior to that other secured Indebtedness.
Certain other covenants are applicable to the notes as described in the
accompanying prospectus. See Description of Debt SecuritiesCertain Covenants
in the accompanying prospectus.
No Sinking
Fund
The notes will not be entitled
to any sinking fund.
Issuance of Additional
Notes
In addition to the notes, we
may issue from time to time other series of debt securities under the indenture
consisting of debentures, notes or other evidences of indebtedness that are
separate from and independent of the notes. The indenture does not limit the
amount of debt securities or any other debt (whether secured or unsecured or
whether subordinated or unsubordinated) which we or, with respect to the notes,
our subsidiaries may incur.
S-19
We may from time to time,
without the consent of, or notice to, the holders of the notes, reopen the
series of debt securities of which the notes are a part and issue additional
notes having the same ranking and the same interest rate, maturity and other
terms as the notes, except for the public offering price and the issue date and,
if applicable, the initial interest accrual date and the initial interest
payment date. Any such additional notes having similar terms, together with the
notes, will constitute a single series of debt securities under the indenture.
If, however, any such additional notes are not fungible with the notes for U.S.
federal income tax purposes, the additional notes will have a separate CUSIP
number. No such additional notes may be issued if an event of default has
occurred and is continuing with respect to the series of debt securities of
which such notes are a part. Unless the context otherwise requires, for all
purposes of the indenture and this Description of the Notes, references to the
notes include any additional notes of the same series actually
issued.
Payment and Paying
Agents
We will maintain in the place
of payment for the notes an office or agency where the notes may be presented or
surrendered for payment or for registration of transfer or exchange and where
holders may serve us with notices and demands in respect of the notes and the
indenture.
We will give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If we fail to maintain any required office or agency or fail
to furnish the Trustee with the address of such office or agency, presentations,
surrenders, notices and demands may be made or served at the corporate trust
office of the Trustee. We have appointed the Trustee as our agent to receive all
presentations, surrenders, notices and demands with respect to the notes.
Optional
Redemption
The notes will be redeemable,
in whole or in part, at any time and from time to time prior
to
February 15, 2022
(the date that is
one month
prior to the stated
maturity date of the notes) (the Par Call Date), at a redemption price equal
to the greater of (i) 100% of the principal amount of the notes to be redeemed,
and (ii) as determined by the Quotation Agent (as defined below), the sum of the
present values of the remaining scheduled payments of principal and interest on
the notes being redeemed (not including any portion of such payments of interest
accrued as of the date of redemption), discounted to the Par Call Date on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Treasury Rate (as defined below),
plus
25
basis
points, plus accrued but unpaid interest thereon to, but excluding, the date of
redemption.
In addition, at any time and
from time to time on or after the Par Call Date, the notes will be redeemable,
in whole or in part, at a redemption price equal to 100% of the principal amount
of the notes to be redeemed, plus accrued but unpaid interest thereon to, but
excluding, the date of redemption.
Notice of any redemption will
be mailed (or sent electronically in accordance with applicable DTC procedures)
at least 30 days, but not more than 60 days, before the redemption date to each
registered holder of notes to be redeemed. Unless we default in payment of the
redemption price, on and after the redemption date, interest will cease to
accrue on the notes or portion thereof called for redemption.
We are not required (i) to
register, transfer or exchange notes during the period from the opening of
business 15 days before the day a notice of redemption relating to the notes
selected for redemption is sent to the close of business on the day that notice
is sent, or (ii) to register, transfer or exchange any such note so selected for
redemption, except for the unredeemed portion of any note being redeemed in
part.
Comparable Treasury Issue
means the United States Treasury security selected by the Quotation Agent as
having a maturity comparable to the remaining term 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 notes of
comparable maturity to the remaining term of the notes.
S-20
Comparable Treasury Price
means, with respect to any redemption date, (i) the average of three Reference
Treasury Dealer Quotations for such redemption date, after excluding the highest
and lowest such Reference Treasury Dealer Quotations, or (ii) if the Quotation
Agent obtains fewer than three such Reference Treasury Dealer Quotations, the
average of all such quotations.
Quotation Agent means a
Reference Treasury Dealer appointed by us.
Reference Treasury Dealer
means (i) Barclays Capital Inc., Citigroup Global Markets Inc., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and their respective successors;
provided, however, that if any of the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a Primary Treasury Dealer), we
will substitute therefor another Primary Treasury Dealer and (ii) any two other
Primary Treasury Dealers selected by us.
Reference Treasury Dealer
Quotations means, with respect to each Reference Treasury Dealer and any
redemption date, the average, as determined by us, 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 Quotation Agent 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, the rate per annum equal to the semi-annual
equivalent yield to maturity of the Comparable Treasury Issue, assuming 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.
Change of Control
If a Change of Control
Triggering Event occurs with respect to the notes, unless we have exercised our
right to redeem the notes as described above, we will be required to make an
offer (a Change of Control Offer) to each holder of the notes to repurchase
all or any part (equal to $2,000 and integral multiples of $1,000 in excess
thereof) of that holders notes on the terms set forth in such notes. In a
Change of Control Offer, we will be required to 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 repurchase (a Change of Control Payment). Within 30 days following any
Change of Control Triggering Event or, at our option, prior to any Change of
Control, but after public announcement of the transaction that constitutes or
may constitute the Change of Control, a notice will be mailed (or sent
electronically in accordance with applicable DTC procedures) to holders of the
notes, with a copy to the Trustee, describing the transaction that constitutes
or may constitute the Change of Control Triggering Event and offering to
repurchase the notes on the date specified in the applicable notice, which date
will be no earlier than 30 days and no later than 60 days from the date such
notice is mailed or sent (a Change of Control Payment Date). The notice will,
if mailed or sent prior to the date of consummation of the Change of Control,
state that the Change of Control Offer is conditioned on the Change of Control
Triggering Event occurring on or prior to the applicable Change of Control
Payment Date.
On each 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 applicable
Change of Control Offer and not withdrawn;
|
●
|
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 not withdrawn;
and
|
●
|
deliver or cause to be
delivered to the Trustee the notes properly accepted together with an
officers certificate stating the aggregate principal amount of notes or
portions of notes being repurchased.
|
S-21
We will not be required to
make a Change of Control Offer upon the occurrence of 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 the third party purchases all notes properly tendered and not withdrawn
under its offer. In addition, we will not repurchase any notes if there has
occurred and is continuing on the Change of Control Payment Date an event of
default under the indenture, other than a default in the payment of the Change
of Control Payment upon a Change of Control Triggering Event.
Unless we exercise our right
to redeem the notes, we will be required to 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 Offer provisions of the notes, we will be
required to comply with those securities laws and regulations and will not be
deemed to have breached our obligations under the Change of Control Offer
provisions of the notes by virtue of any such conflict and compliance.
If holders of not less than
90% in aggregate principal amount of the outstanding notes properly tender and
do not withdraw such notes in a Change of Control Offer (or an offer made by a
third party as described above) and we, or any third-party making an offer in
lieu of us, as described above, purchase all of the notes properly tendered and
not withdrawn by such holders, we or the third party making such offer will have
the right, upon not less than 30 nor more than 60 days prior notice, given not
more than 30 days following such purchase pursuant to the Change of Control
Offer or offer by such third party described above, to redeem all notes that
remain outstanding following such purchase at a redemption price in cash equal
to the applicable Change of Control Payment.
If a Change of Control Offer
is made, there can be no assurance that we will have available funds sufficient
to make the Change of Control Payment for all of the notes that may be tendered
for repurchase.
For purposes of the Change of
Control Offer provisions of the notes, the following terms will be applicable:
Change of Control means the occurrence of any of the following: (1) the direct
or indirect sale, lease, transfer, conveyance or other disposition (other than
by way of merger or consolidation), in one or more series of related
transactions, of our assets and the assets of our subsidiaries substantially as
an entirety or as an entirety, taken as a whole, to any person, other than our
company or one of our subsidiaries; (2) the consummation of any transaction
(including, without limitation, any merger or consolidation) the result of which
is that any person becomes the beneficial owner (as defined in Rules 13d-3 and
13d-5 under the Exchange Act), directly or indirectly, of more than 50% of our
outstanding voting stock or other voting stock into which our voting stock is
reclassified, consolidated, exchanged or changed in such transaction, measured
by voting power rather than number of shares; (3) we consolidate with, or merge
with or into, any person, or any person consolidates with, or merges with or
into, us, in any such event pursuant to a transaction in which any of our
outstanding voting stock or the voting stock of such other person is converted
into or exchanged for cash, securities or other property, other than any such
transaction where the shares of our voting stock outstanding immediately prior
to such transaction constitute, or are converted into or exchanged for, a
majority of the outstanding voting stock of the surviving person or any direct
or indirect parent company of the surviving person immediately after giving
effect to such transaction; (4) the first day on which a majority of the members
of our board of directors are not continuing directors; or (5) the adoption of a
plan relating to our liquidation or dissolution. Notwithstanding the foregoing,
a transaction will not be deemed to involve a Change of Control under clause (2)
or (3) above if (i) we become a direct or indirect wholly owned subsidiary of a
holding company 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. The term person, as used in this definition, has the
meaning given thereto in Section 13(d)(3) of the Exchange Act.
S-22
Change of Control Triggering
Event means the occurrence of both a Change of Control and a Rating Event.
Continuing directors means,
as of any date of determination, any member of our board of directors who (1)
was a member of such board of directors on the date the notes were issued or (2)
was nominated for election, elected or appointed to such board of directors with
the approval of a majority of the continuing directors who were members of such
board of directors at the time of such nomination, election or appointment
(either by a specific vote or resolution adopted by our board of directors or by
approval by our board of directors of our proxy statement in which such member
was named as a nominee for election as a director).
Fitch means Fitch Inc., and
its successors.
Investment Grade Rating
means a rating equal to or higher than Baa3 (or the equivalent) by Moodys, BBB-
(or the equivalent) by S&P and BBB- (or the equivalent) by Fitch, and the
equivalent investment grade credit rating from any replacement Rating Agency or
Rating Agencies selected by us.
Moodys means Moodys
Investors Service, Inc., and its successors.
Rating Agencies means (1)
each of Moodys, S&P and Fitch; and (2) if any or all of Moodys, S&P or
Fitch 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 selected by us (as certified by a resolution of our board of
directors) as a replacement agency for Moodys, S&P or Fitch, or all of
them, as the case may be.
Rating Event means the
rating on the notes is lowered by all three of the Rating Agencies from an
Investment Grade Rating to below an Investment Grade Rating, in any case on any
day during the period (which period will be extended so long as the rating of
the notes is under publicly announced consideration for a possible downgrade by
any of the Rating Agencies) commencing upon the first public notice by us of the
occurrence of a Change of Control or our intention to effect a Change of Control
and ending 60 days following the consummation of the Change of Control;
provided, however, that a Rating Event otherwise arising by virtue of a
particular reduction in rating will not be deemed to have occurred in respect of
a particular Change of Control (and thus will not be deemed a Rating Event for
purposes of the definition of Change of Control Triggering Event) if any of the
Rating Agencies does not announce or publicly confirm or inform us that the
reduction in ratings 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 been consummated at the time of the Rating Event).
S&P means Standard &
Poors Ratings Services, a division of The McGraw-Hill Companies, Inc., and its
successors.
Voting stock means, with
respect to any specified person (as that term is used in Section 13(d)(3) of
the Exchange Act) as of any date, the capital stock of such person that is at
the time entitled to vote generally in the election of the board of directors of
such person.
Our obligation to purchase the
notes following a Change of Control Triggering Event is subject to the
provisions described in the section titled Discharge, Legal Defeasance and
Covenant Defeasance in this prospectus supplement.
S-23
Discharge, Legal Defeasance
and Covenant Defeasance
We may be discharged from all
of our obligations with respect to the outstanding notes, be discharged from our
obligations with respect to the notes (except as otherwise specified in the
indenture) or be released from our obligation to comply with the provisions of
the indenture with respect to the notes as described under Description of Debt
SecuritiesDischarge, Legal Defeasance and Covenant Defeasance in the
accompanying prospectus.
The Trustee Under the
Indenture
We maintain ordinary banking
relationships and, from time to time, obtain credit facilities and lines of
credit with a number of banks, including the Trustee, Wells Fargo Bank, National
Association. Neither the Trustee nor any paying agent shall be responsible for
monitoring our rating status, making any request upon any Rating Agency, or
determining whether any Rating Event has occurred. The transferor of any note
shall provide or cause to be provided to the Trustee all information necessary
to allow the Trustee to comply with any applicable tax reporting obligations,
including without limitation any cost basis reporting obligations under Section
6045 of the Code (as defined under Material U.S. Federal Income Tax
Considerations below). The Trustee may rely on information provided to it and
shall have no responsibility to verify or ensure the accuracy of such
information. In connection with any proposed exchange of a certificated note for
a global note, we or DTC shall be required to provide or cause to be provided to
the Trustee all information necessary to allow the Trustee to comply with any
applicable tax reporting obligations, including without limitation any cost
basis reporting obligations under Section 6045 of the Code. The Trustee may rely
on information provided to it and shall have no responsibility to verify or
ensure the accuracy of such information.
Governing
Law
The indenture is, and the
notes will be, governed by and construed in accordance with the laws of the
State of New York.
Other Terms of the
Notes
With respect to the notes, the
term Financing Lease means any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP as it exists on to be capitalized on a balance sheet of the
lessee.
Book-Entry, Delivery and
Form
Global
Notes
We will issue the notes in the
form of one or more global notes in definitive, fully registered, book-entry
form. The global notes will be deposited with or on behalf of DTC and registered
in the name of Cede & Co., (as nominee of DTC) or such other name as may be
requested by an authorized representative of DTC.
DTC, Clearstream and
Euroclear
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 DTC. Investors may hold interests in the global notes through
either DTC (in the United States), or Clearstream or Euroclear (in Europe)
either directly if they are participants in such systems or indirectly through
organizations that are participants in such systems. Clearstream and Euroclear
will hold interests on behalf of their participants through customers
securities accounts in Clearstreams and Euroclears names on the books of their
U.S. depositaries, which in turn will hold such interests in customers
securities accounts in the U.S. depositaries names on the books of DTC.
S-24
DTC has advised us as follows:
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DTC 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
under Section 17A of the Securities Exchange Act of 1934, as
amended.
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DTC holds securities
that its participants deposit with DTC and facilitates the post-trade
settlement among participants of sales and other securities transactions
in deposited securities through electronic computerized book-entry
transfers and pledges between participants accounts, thereby eliminating
the need for physical movement of securities certificates.
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●
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Direct participants
include both U.S. and non-U.S. securities brokers and dealers, banks,
trust companies, clearing corporations and other organizations.
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●
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DTC is owned by a number
of its direct participants.
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Access to the DTC system
is also available to others such as both U.S. and non-U.S. securities
brokers and dealers, banks, trust companies and clearing corporations that
clear through or maintain a custodial relationship with a direct
participant, either directly or indirectly.
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The rules applicable to
DTC and its direct and indirect participants are on file with the SEC.
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Clearstream is incorporated
under the laws of Luxembourg as a professional depositary. Clearstream holds
securities for its customers and facilitates the clearance and settlement of
securities transactions between its customers through electronic book-entry
changes in accounts of its customers, thereby eliminating the need for physical
movement of certificates. Clearstream provides to its customers, among other
things, services for safekeeping, administration, clearance and settlement of
internationally traded securities and securities lending and borrowing.
Clearstream interfaces with domestic markets in several countries. As a
professional depositary, Clearstream is subject to regulation by the Luxembourg
Commission for the Supervision of the Financial Sector and the Central Bank of
Luxembourg. Clearstream customers are recognized financial institutions around
the world, including underwriters, securities brokers and dealers, banks, trust
companies, clearing corporations and other organizations and may include the
underwriters. Indirect access to Clearstream is also available to others, such
as banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Clearstream customer either directly or
indirectly.
The Euroclear System was
created in 1968 to hold securities for participants of Euroclear and to clear
and settle transactions between Euroclear participants through simultaneous
electronic book-entry delivery against payment, thereby eliminating the need for
physical movement of certificates and any risk from lack of simultaneous
transfers of securities and cash. Euroclear provides various other services,
including securities lending and borrowing and interfaces with domestic markets
in several countries. Euroclear is operated by Euroclear Bank S.A./N.V. (the
Euroclear Operator). 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 other firms that clear through or maintain a custodial
relationship with a Euroclear participant, either directly or indirectly.
The Euroclear Operator is
licensed by the Belgian Banking and Finance Commission to carry out banking
activities on a global basis. As a Belgian bank, it is regulated and examined by
the Belgian Banking and Finance Commission. As the operator of a securities
settlement system, the Euroclear Operator is also overseen by the National Bank
of Belgium.
S-25
We have provided the
descriptions of the operations and procedures of DTC, Clearstream and Euroclear
in this prospectus supplement solely as a matter of convenience. These
operations and procedures are solely within the control of those organizations
and are subject to change by them from time to time. None of us, the
underwriters or the Trustee takes any responsibility for these operations or
procedures, and you are urged to contact DTC, Clearstream and Euroclear or their
participants directly to discuss these matters.
We expect that under
procedures established by DTC:
●
|
upon deposit of the
global notes with DTC or its custodian, DTC will credit on its internal
system the accounts of direct participants designated by the underwriters
with portions of the principal amounts of the global notes;
and
|
●
|
ownership of the notes
will be shown on, and the transfer of ownership thereof will be effected
only through, records maintained by DTC or its nominee, with respect to
interests of direct participants, and the records of direct and indirect
participants, with respect to interests of persons other than
participants.
|
The laws of some jurisdictions
may require that purchasers of securities take physical delivery of those
securities in definitive form. Accordingly, the ability to transfer interests in
the notes represented by a global note to those persons may be limited. In
addition, because DTC can act only on behalf of its participants, who in turn
act on behalf of persons who hold interests through participants, the ability of
a person having an interest in notes represented by a global note to pledge or
transfer those interests to persons or entities that do not participate in DTCs
system, or otherwise to take actions in respect of such interest, may be
affected by the lack of a physical definitive security in respect of such
interest.
So long as DTC or its nominee
is the registered owner of a global note, DTC or that nominee will be considered
the sole owner or holder of the notes represented by that global note for all
purposes under the indenture and under the notes. DTC has no knowledge of the
actual beneficial owners of the notes; DTCs records reflect only the identity
of the direct participants to whose accounts such notes are credited, which may
or may not be the beneficial owners. The participants will remain responsible
for keeping account of their holdings on behalf of their customers. Except as
provided below, owners of beneficial interests in a global note will not be
entitled to have notes represented by that global note registered in their
names, will not receive or be entitled to receive physical delivery of
certificated notes and will not be considered the owners or holders thereof
under the indenture or under the notes for any purpose, including with respect
to the giving of any direction, instruction or approval to the Trustee.
Accordingly, each holder owning a beneficial interest in a global note must rely
on the procedures of DTC and, if that holder is not a direct or indirect
participant, on the procedures of the participant through which that holder owns
its interest, to exercise any rights of a holder of notes under the indenture or
a global note.
Conveyance of notices and
other communications by DTC to direct participants, by direct participants to
indirect participants, and by direct participants and indirect participants to
beneficial owners will be governed by arrangements among them, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Redemption notices will be
sent to DTC. If less than all of the notes of a series are being redeemed, DTCs
practice is to determine by lot the amount of the interest of each direct
participant in such series to be redeemed.
In any case where a vote may
be required with respect to the notes of any series, neither DTC nor its nominee
will consent or vote with respect to such notes. Under its usual procedures DTC
mails an omnibus proxy to Western Union as soon as possible after the record
date. The omnibus proxy assigns Cede & Co.s consenting or voting rights to
those direct participants to whose accounts interests in the notes of the series
are credited on the record date (identified in the listing attached to the
omnibus proxy).
S-26
Neither we nor the Trustee
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of notes by DTC, Clearstream or Euroclear, or for
maintaining, supervising or reviewing any records of those organizations
relating to the notes.
Payments on the notes
represented by the global notes will be made to DTC or its nominee, as the case
may be, as the registered owner thereof. We expect that DTC or its nominee, upon
receipt of any payment on the notes represented by a global note, will credit
participants accounts with payments in amounts proportionate to their
respective beneficial interests in the global note as shown in the records of
DTC or its nominee. We also expect that payments by participants to owners of
beneficial interests in the global note held through such participants will be
governed by standing instructions and customary practice as is now the case with
securities held for the accounts of customers registered in the names of
nominees for such customers. The participants will be responsible for those
payments.
Distributions on the notes
held beneficially through Clearstream will be credited to cash accounts of its
customers in accordance with its rules and procedures, to the extent received by
the U.S. depositary for Clearstream.
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, 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.
Distributions on the notes
held beneficially through Euroclear will be credited to the cash accounts of its
participants in accordance with the Terms and Conditions, to the extent received
by the U.S. depositary for Euroclear.
In any case where we have made
a tender offer for the purchase of any notes, a beneficial owner must give
notice through a participant to a tender agent to elect to have its notes
purchased or tendered. The beneficial owner must deliver notes by causing the
direct participants to transfer the participants interest in the notes, on
DTCs records, to a tender agent. The requirement for physical delivery of notes
in connection with an optional tender or a mandatory purchase is satisfied when
the ownership rights in the notes are transferred by direct participants on
DTCs records and followed by a book-entry credit of tendered notes to the
tender agents DTC account.
Clearance and Settlement
Procedures
Initial settlement for the
notes will be made in immediately available funds. Secondary market trading
between DTC participants will occur in the ordinary way in accordance with DTC
rules and will be settled in immediately available funds. Secondary market
trading between Clearstream customers and/or Euroclear participants will occur
in the ordinary way in accordance with the applicable rules and operating
procedures of Clearstream and Euroclear, as applicable, 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 DTC, on the one hand, and
directly or indirectly through Clearstream customers or Euroclear participants,
on the other, will be effected through DTC in accordance with DTC rules on
behalf of the relevant European international clearing system by the 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
S-27
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 the U.S. depositary to take action to effect final
settlement on its behalf by delivering or receiving the notes in DTC, and making
or receiving payment in accordance with normal procedures for same-day funds
settlement applicable to DTC. Clearstream customers and Euroclear participants
may not deliver instructions directly to their U.S. depositaries.
Because of time-zone
differences, credits of the notes received in Clearstream or Euroclear as a
result of a transaction with a DTC participant will be made during subsequent
securities settlement processing and dated the business day following the DTC
settlement date. Such credits or any transactions in the notes settled during
such processing will be reported to the relevant Clearstream customers or
Euroclear participants on such business day. Cash received in Clearstream or
Euroclear as a result of sales of the notes by or through a Clearstream customer
or a Euroclear participant to a DTC participant will be received with value on
the DTC settlement date but will be available in the relevant Clearstream or
Euroclear cash account only as of the business day following settlement in DTC.
Although DTC, Clearstream and
Euroclear have agreed to the foregoing procedures to facilitate transfers of the
notes among participants of DTC, Clearstream and Euroclear, they are under no
obligation to perform or continue to perform such procedures and such procedures
may be changed or discontinued at any time.
The information in this
section regarding DTC, Clearstream and Euroclear and their book-entry systems
has been obtained from sources that we believe to be reliable, but we take no
responsibility for the accuracy of that information.
Certificated Notes
We will issue certificated
notes to each person that DTC identifies as the beneficial owner of the notes
represented by a global note upon surrender by DTC of the global note if:
●
|
DTC notifies us that it
is no longer willing or able to act as a depositary for such global note
or ceases to be a clearing agency registered under the Exchange Act and we
have not appointed a successor depositary within 90 days of that notice or
becoming aware that DTC is no longer so
registered;
|
●
|
an event of default has
occurred and is continuing, and DTC requests the issuance of certificated
notes; or
|
●
|
we determine not to have
the notes represented by a global note.
|
Neither we nor the Trustee
will be liable for any delay by DTC, its nominee or any direct or indirect
participant in identifying the beneficial owners of the notes. We and the
trustee may conclusively rely on, and will be protected in relying on,
instructions from DTC or its nominee for all purposes, including with respect to
the registration and delivery, and the respective principal amounts, of the
certificated notes to be issued.
S-28
MATERIAL U.S. FEDERAL
INCOME TAX CONSIDERATIONS
The following is a discussion
of the material U.S. federal income tax consequences of the ownership and
disposition of the notes to beneficial owners of the notes. This discussion is
based upon the Internal Revenue Code of 1986, as amended (the Code), the U.S.
Treasury regulations promulgated thereunder, administrative pronouncements and
judicial decisions, all as of the date hereof and all of which are subject to
change, possibly on a retroactive basis.
This discussion applies only
to beneficial owners that acquire the notes in connection with their initial
issuance at their initial offering price and hold the notes as capital assets
within the meaning of section 1221 of the Code. This discussion does not address
all aspects of U.S. federal income taxation that might be important to
particular investors in light of their individual circumstances or the U.S.
federal income tax consequences applicable to special classes of taxpayers, such
as banks and other financial institutions, insurance companies, real estate
investment trusts, regulated investment companies, tax-exempt organizations,
partnerships (or entities properly classified as partnerships for U.S. federal
income tax purposes) or other pass-through entities, dealers in securities,
traders in securities that elect to use a mark-to-market method of accounting,
persons liable for U.S. federal alternative minimum tax, U.S. Holders (as
defined below) whose functional currency is not the U.S. Dollar, former citizens
or residents of the United States and persons holding the notes as part of a
hedging or conversion transaction or a straddle. The discussion does not address
any federal estate or gift, foreign, state, local or non-income tax consequences
of the ownership or disposition of the notes to beneficial owners of the
notes.
As used in this prospectus
supplement, the term U.S. Holder means a beneficial owner of a note that is
for U.S. federal income tax purposes:
●
|
a citizen or individual
resident of the United States;
|
●
|
a corporation (or other
entity properly classified as a corporation for U.S. federal income tax
purposes) created or organized in or under the laws of the United States,
any state within the United States, or the District of
Columbia;
|
●
|
an estate, the income of
which is subject to U.S. federal income taxation regardless of its source;
or
|
●
|
a trust, if (i) a U.S.
court is able to exercise primary supervision over the trusts
administration and one or more United States persons (as defined in the
Code) have the authority to control all substantial decisions of the
trust, or (ii) in the case of a trust that was treated as a domestic trust
under the laws in effect before 1997, a valid election is in place under
applicable U.S. Treasury regulations to treat such trust as a domestic
trust.
|
The term Non-U.S. Holder
means any beneficial owner of a note that is not a U.S. Holder and is not a
partnership or other entity properly classified as a partnership for U.S.
federal income tax purposes. For the purposes of this prospectus supplement,
U.S. Holders and Non-U.S. Holders are referred to collectively as Holders.
If
a partnership or other entity properly classified as a partnership for U.S.
federal income tax purposes is a beneficial owner of a note, the tax treatment
of a partner will generally depend upon the status of the partner and the
activities of the entity. Such entities and partners in such entities should
consult their own tax advisors about the U.S. federal income and other tax
consequences of the ownership and disposition of a note.
Holders should consult their
own tax advisors regarding the application of the U.S. federal income tax laws
to their particular situations and the consequences under federal estate or gift
tax laws, as well as foreign, state or local laws and tax treaties, and the
possible effects of changes in tax laws.
S-29
U.S. Federal Income
Taxation of U.S. Holders
Payments of
Interest
Stated interest on notes
beneficially owned by a U.S. Holder generally will be taxable as ordinary
interest income at the time payments are accrued or are received in accordance
with the U.S. Holders regular method of accounting for U.S. federal income tax
purposes.
Effect of Certain
Contingencies and Options
In certain circumstances, we
may be obligated to pay a change of control premium on the notes (as described
above under Description of the NotesChange of Control). This obligation may
implicate the provisions of U.S. Treasury regulations relating to contingent
payment debt instruments. We intend to take the position that the contingency
that such payment will be made is remote or incidental (within the meaning
of applicable U.S. Treasury regulations) and therefore that the notes are not
subject to the rules governing contingent payment debt instruments. Although not
entirely clear, under our position any change of control premium likely will be
taxable to a U.S. Holder as capital gain rather than ordinary income when
received or accrued, according to such U.S. Holders method of accounting for
U.S. federal income tax purposes.
In addition, in certain
circumstances, if the debt ratings on the notes change, we may be obligated to
pay additional interest on the notes (as described above under Description of
the NotesGeneralInterest Rate Adjustment). This obligation may also implicate
the provisions of U.S. Treasury regulations relating to contingent payment debt
instruments. We believe (and intend to take the position) that the contingency
that such additional interest will be paid will not cause the notes to be
subject to the rules governing contingent payment debt instruments.
If our position were found to
be incorrect and the notes were determined to be contingent payment debt
instruments, a U.S. Holder would, among other things, be required to accrue
interest income at a comparable yield, which likely would be higher than the
stated interest rate on the notes, and would cause any gain from the sale or
other disposition of a note to be treated as ordinary interest income, rather
than capital gain. This discussion assumes that the notes will not be subject to
the rules governing contingent payment debt instruments.
We may redeem the
notes at any time in whole or from time to time in part at the prices specified
in this prospectus supplement under Description of the Notes Optional
Redemption. We intend to take the position that any additional amounts payable
upon such a redemption will be taxable to a U.S. Holder when received or
accrued, according to such U.S. Holders method of accounting for U.S. federal
income tax purposes.
Sale, Exchange or
Redemption of the Notes
Upon the sale, exchange,
redemption or other taxable disposition of a note, a U.S. Holder generally will
recognize gain or loss equal to the difference, if any, between (i) the amount
realized upon the sale, exchange, redemption or other taxable disposition, other
than amounts attributable to accrued and unpaid interest (which will be taxed as
ordinary interest income to the extent such interest has not been previously
included in income), and (ii) the U.S. Holders adjusted tax basis in the note.
The amount realized by a U.S. Holder is the sum of cash plus the fair market
value of all other property received on such sale, exchange, redemption or other
taxable disposition. A U.S. Holders adjusted tax basis in a note generally will
be its cost for the note.
S-30
Subject to the discussion
above under Effect of Certain Contingencies and Options, the gain or loss a
U.S. Holder recognizes on the sale, exchange, redemption or other taxable
disposition of a note generally will be capital gain or loss. Such gain or loss
generally will be long-term capital gain or loss if a U.S. Holder has held the
note for more than 12 consecutive months. For non-corporate U.S. Holders,
long-term capital gains are currently taxed at a lower rate than ordinary
income. The deductibility of capital losses is subject to limitations. A U.S.
Holder should consult its own tax advisor regarding the deductibility of capital
losses in its particular circumstances.
Tax on Net Investment
Income
A 3.8% tax will be imposed on
a portion or all of the net investment income of certain individuals with a
modified adjusted gross income of over $200,000 ($250,000 in the case of joint
filers) and on the undistributed net investment income of certain estates and
trusts. For these purposes, net investment income generally will include
interest (including interest paid with respect to a note), dividends, annuities,
royalties, rents, net gain attributable to the disposition of property not held
in a trade or business (including net gain from the sale, exchange, redemption
or other taxable disposition of a note) and certain other income, but will be
reduced by any deductions properly allocable to such income or net gain. U.S.
Holders should consult their own tax advisors regarding the implications of the
net investment income tax in their particular circumstances.
Backup Withholding and
Information Reporting
In general, a U.S. Holder that
is not an exempt recipient will be subject to U.S. federal backup withholding
at the applicable rate with respect to payments on its notes and the proceeds of
a sale, exchange, redemption or other taxable disposition of its notes, unless
the U.S. Holder provides its taxpayer identification number to the paying agent
and certifies, under penalties of perjury, that it is not subject to backup
withholding on an Internal Revenue Service (the IRS) Form W-9 (Request for
Taxpayer Identification Number and Certification) or a suitable substitute form
and otherwise complies with the applicable requirements of the backup
withholding rules. Backup withholding is not an additional tax. The amount of
any backup withholding from a payment to a U.S. Holder may be allowed as a
credit against such U.S. Holders U.S. federal income tax liability and may
entitle such U.S. Holder to a refund, provided the required information is
furnished to the IRS in a timely manner. In addition, payments on notes made to,
and the proceeds of a sale or other taxable disposition by, a U.S. Holder that
is not an exempt recipient generally will be subject to information reporting
requirements.
U.S. Federal Income
Taxation of Non-U.S. Holders
Payments of
Interest
Subject to the discussion
below under Backup Withholding and Information Reporting and Foreign
Account Tax Compliance, a Non-U.S. Holder generally will not be subject to U.S.
federal withholding tax on interest paid on its notes so long as:
●
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the Non-U.S. Holder does not actually or constructively own 10% or more of the total combined voting
power of all of our stock entitled to vote;
|
●
|
the Non-U.S. Holder is not a “controlled foreign corporation” that is related to us, actually or by
attribution, through stock ownership; and
|
●
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either (i) the Non-U.S. Holder certifies under penalties of perjury on IRS Form W-8BEN or Form
W-8BEN-E (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding) or
a suitable substitute form that it is not a United States person (as defined in the Code), and provides its
name, address, and U.S. taxpayer identification number, if any, or (ii) a securities clearing organization,
bank or other financial institution that holds customers’ securities in the ordinary course of its trade or
business and holds the notes on behalf of the Non-U.S. Holder certifies under penalties of perjury that
the certification referred to in clause (i) has been received from the Non-U.S. Holder, and furnishes a
copy thereof.
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S-31
Except as described below
under Effectively Connected Income, a Non-U.S. Holder that does not qualify
for exemption from withholding as described above generally will be subject to
withholding of U.S. federal income tax at a rate of 30% on payments of interest
on the notes. A Non-U.S. Holder may be entitled to the benefits of an income tax
treaty under which interest on the notes is subject to a reduced rate of U.S.
withholding tax or is exempt from U.S. withholding tax, in which case the
Non-U.S. Holder will be required to furnish a properly completed and executed
IRS Form W-8BEN or Form W-8BEN-E claiming the reduction or exemption and comply
with any other applicable procedures.
Special rules regarding
exemption from, or reduced rates of, U.S. withholding tax may apply in the case
of notes held by partnerships or certain types of trusts. Partnerships and
trusts that are prospective purchasers should consult their tax advisors
regarding special rules that may be applicable in their particular
circumstances.
Sale, Exchange or
Redemption of the Notes
Generally, gain recognized by
a Non-U.S. Holder on the sale, exchange, redemption or other taxable disposition
of a note will be exempt from U.S. federal income and withholding tax,
unless:
●
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the gain is effectively
connected with the Non-U.S. Holders conduct of a trade or business within
the United States (and, if a treaty applies, is attributable to a
permanent establishment or fixed base maintained by the Non-U.S. Holder in
the United States); or
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●
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the Non-U.S. Holder is
an individual who is present in the United States for 183 days or more
during the taxable year, and certain other conditions are
met.
|
Effectively Connected
Income
If interest, gain or other
income recognized by a Non-U.S. Holder on a note is effectively connected with
the Non-U.S. Holders conduct of a trade or business within the United States
(and, if a treaty applies, is attributable to a permanent establishment or fixed
base maintained by the Non-U.S. Holder in the United States), the Non-U.S.
Holder will not be subject to the withholding tax discussed above, although the
Non-U.S. Holder will be required to provide a properly completed and executed
IRS Form W-8ECI (Certificate of Foreign Persons Claim That Income Is
Effectively Connected With the Conduct of a Trade or Business in the United
States) to avoid the withholding. Although it will not be subject to the
withholding tax, the Non-U.S. Holder generally will be subject to U.S. federal
income tax on such interest, gain or other income as if it were a United States
person (as defined in the Code). In addition to such U.S. federal income tax, if
the Non-U.S. Holder is a corporation, it may be subject to an additional 30% (or
such lower rate as may be provided for under an applicable treaty) branch
profits tax.
Backup Withholding and
Information Reporting
The amount of interest on a
note that is paid to a Non-U.S. Holder and the tax, if any, withheld with
respect to such interest must be reported annually to the IRS. These reporting
requirements apply regardless of whether U.S. withholding tax on such payments
was reduced or eliminated by any applicable tax treaty or otherwise. Copies of
the information returns reporting those payments and the amounts withheld may
also be made available to the tax authorities in the country where a Non-U.S.
Holder is a resident under the provisions of an applicable income tax treaty or
agreement.
Under some circumstances, U.S.
Treasury regulations require backup withholding and additional information
reporting on payments of interest and other reportable payments. Such backup
withholding and additional information reporting will not apply to payments on
the notes made to a Non-U.S. Holder if the certification described above under
Payments of Interest or Effectively Connected Income is received from the
Non-U.S. Holder.
S-32
Backup withholding and
information reporting generally will not apply to payments of proceeds from the
sale or other disposition of a note made to a Non-U.S. Holder by or through the
foreign office of a broker. However, information reporting requirements, and
possibly backup withholding, will apply if such broker is, for U.S. federal
income tax purposes, a United States person (as defined in the Code) or has
certain other enumerated connections with the United States, unless such broker
has documentary evidence in its records that the Non-U.S. Holder is not a United
States person (as defined in the Code) and certain other conditions are met, or
the Non-U.S. Holder otherwise establishes an exemption. Payments of proceeds
from the sale or other disposition of a note made to a Non-U.S. Holder by or
through the U.S. office of a broker are subject to information reporting and
backup withholding at the applicable rate unless the Non-U.S. Holder certifies,
under penalties of perjury, that it is not a United States person (as defined in
the Code) and satisfies certain other conditions or otherwise establishes an
exemption. The certification procedures described above with respect to interest
in the preceding paragraph will avoid backup withholding on payments of proceeds
from the sale or other disposition of a note. Backup withholding is not an
additional tax. A Non-U.S. Holder may obtain a refund or credit against its U.S.
federal income tax liability of any amounts withheld under the backup
withholding rules, provided the required information is furnished to the IRS in
a timely matter.
Non-U.S. Holders should
consult their tax advisors regarding the application of information reporting
and backup withholding in their particular situations, the availability of an
exemption therefrom, and the procedures for obtaining such an exemption, if
available.
Foreign Account Tax
Compliance
The Foreign Account Tax
Compliance Act and related IRS guidance (FATCA) impose a 30% U.S. withholding
tax on certain payments which currently include interest payments on the notes
(and will include gross proceeds, including the return of principal at maturity,
from the sale or other disposition, including redemptions, of the notes
beginning January 1, 2019) made to certain non-United States entities that fail
to take required steps to provide information regarding their United States
accounts or their direct or indirect substantial United States owners, as
applicable, or to make a required certification that they have no such accounts
or owners. We will not be obligated to make any gross up or additional
payments in respect of amounts withheld on the notes if we determine that we
must so withhold in order to comply with FATCA (including the application of an
applicable intergovernmental agreement). Prospective investors should consult
their own tax advisors regarding FATCA and whether it may be relevant to their
ownership and disposition of the notes.
The U.S. federal income tax
discussion set forth above is included for general information only and may not
be applicable depending upon a Holders particular situation. Prospective
purchasers of notes should consult their own tax advisors with respect to the
tax consequences to them of the ownership and disposition of the notes,
including the tax consequences under state, local, estate, foreign and other tax
laws and tax treaties and the possible effects of changes in U.S. or other tax
laws.
S-33
UNDERWRITING
Barclays Capital, Inc.,
Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated are joint book-running managers of the offering and are acting as
representatives of each of the underwriters named below.
Subject to the terms and
conditions of an underwriting agreement among us, Barclays Capital, Inc.,
Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, as representatives of the several underwriters, the underwriters
have severally agreed to purchase from us, and we have agreed to sell to the
underwriters, the principal amount of notes listed opposite their names below at
the public offering price less the underwriting discount set forth on the cover
page of this prospectus supplement:
Underwriters
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|
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Principal Amount
of
Notes
|
Barclays Capital Inc.
|
|
$
|
100,000,000
|
Citigroup Global Markets Inc.
|
|
|
100,000,000
|
Merrill Lynch, Pierce, Fenner & Smith
|
|
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100,000,000
|
|
Incorporated
|
|
|
|
BNY Mellon Capital Markets, LLC
|
|
|
20,000,000
|
U.S. Bancorp Investments, Inc.
|
|
|
20,000,000
|
CIBC World Markets Corp.
|
|
|
12,000,000
|
Credit Suisse Securities (USA) LLC
|
|
|
12,000,000
|
Fifth Third Securities, Inc.
|
|
|
12,000,000
|
J.P. Morgan Securities LLC
|
|
|
12,000,000
|
Scotia Capital (USA) Inc.
|
|
|
12,000,000
|
Total
|
|
$
|
400,000,000
|
The underwriting agreement
provides that the obligations of the underwriters to purchase the notes offered
hereby are subject to certain conditions and that the underwriters will purchase
all of the notes offered by this prospectus supplement if any of the notes are
purchased.
We have been advised by the
underwriters that the underwriters propose to offer the notes directly to the
public at the public offering price set forth on the cover page of this
prospectus supplement and may offer notes to certain dealers at such price less
a concession not in excess
of
0.350%
of the principal
amount of the notes. The underwriters may allow, and such dealers may reallow, a
concession not in excess
of
0.250%
of the principal
amount of the notes to certain other dealers. After the initial public offering,
the underwriters may change the offering price and other selling
terms.
We estimate that our total
expenses of this offering to be paid by us, excluding the underwriting discount,
will be
$0.9 million
.
We have agreed to indemnify
the underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended, or to contribute to payments the
underwriters may be required to make in respect of any of these
liabilities.
The notes are a new issue of
securities with no established trading market. The notes will not be listed on
any securities exchange or quoted on any automated dealer quotation system. The
underwriters may make a market in the notes after completion of the offering,
but will not be obligated to do so and may discontinue any market-making
activities at any time without notice. No assurance can be given as to the
liquidity of the trading market for the notes or that an active trading market
for the notes will develop. If an active trading market for the notes does not
develop, the market price and liquidity of the notes may be adversely
affected.
S-34
In connection with the
offering of the notes, the underwriters may engage in transactions that
stabilize, maintain or otherwise affect the price of the notes. Specifically,
the underwriters may overallot in connection with the offering, creating a short
position. In addition, the underwriters may bid for, and purchase, the notes in
the open market to cover short positions or to stabilize the price of the notes.
Any of these activities may stabilize or maintain the market price of the notes
above independent market levels, but no representation is made hereby that the
underwriters will engage in any of those transactions or of the magnitude of any
effect that the transactions described above may have on the market price of the
notes. The underwriters will not be required to engage in these activities, and
if they engage in these activities, they may end any of these activities at any
time without notice.
The underwriters and their
affiliates have from time to time provided, and may provide in the future,
investment banking, commercial banking and other financial services to us and
our affiliates, for which they have received and may continue to receive
customary fees and commissions. Affiliates of the underwriters in this offering
are also lenders under our revolving credit facilities. We believe that the fees
and commissions paid in respect of participation in the credit facilities were
customary for borrowers with a credit profile similar to ours, for a
similar-size financing and for borrowers in our industry.
Some 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 us
or our affiliates. They have received, or may in the future receive, customary
fees and commissions for these transactions.
In addition, in the ordinary
course of their business activities, the underwriters and their affiliates may
make or hold a broad array of investments and actively trade debt and equity
securities (or related derivative securities) and financial instruments
(including bank loans) for their own account and for the accounts of their
customers. Such investments and securities activities may involve securities
and/or instruments of ours or our affiliates. If any of the underwriters or
their affiliates have a lending relationship with us, certain of those
underwriters or their affiliates routinely hedge, and certain other of those
underwriters may hedge, their credit exposure to us consistent with their
customary risk management policies. Typically, these underwriters and their
affiliates would hedge such exposure by entering into transactions which consist
of either the purchase of credit default swaps or the creation of short
positions in our securities, including potentially the notes offered hereby. Any
such credit default swaps or short positions could adversely affect future
trading prices of the notes offered hereby. The underwriters and their
affiliates may also make investment recommendations and/or publish or express
independent research views in respect of such securities or financial
instruments and may hold, or recommend to clients that they acquire, long and/or
short positions in such securities and instruments.
We expect to deliver the notes
against payment on or about March 15, 2017, which is the fifth U.S. business day
following the date of this prospectus supplement (such settlement being referred
to as T+5). Under Rule 15c6-1 under the Exchange Act, trades in the secondary
market are required to settle in three U.S. business days, unless the parties to
any such trade expressly agree otherwise. Accordingly, purchasers who wish to
trade the notes prior to the third U.S. business day before the settlement date
will be required, by virtue of the fact that the notes initially settle in T+5,
to specify an alternate settlement arrangement at the time of any such trade to
prevent a failed settlement. Purchasers of the notes who wish to trade the notes
prior to the third U.S. business day before the settlement date should consult
their advisors.
Selling
Restrictions
European Economic
Area
Neither this prospectus
supplement nor the accompanying prospectus is a prospectus for the purposes of
the Prospectus Directive (as defined herein). This prospectus supplement and the
accompanying prospectus have been prepared on the basis that any offer of notes
in any Member State of the European Economic Area which has implemented the
Prospectus Directive (each, a Relevant Member State) will be made pursuant to
an exemption under the Prospectus Directive from the requirement to publish a
prospectus for offers of notes. Accordingly any person making or intending to
make an offer in that Relevant Member State of notes which are the subject
S-35
of
the offering contemplated in this prospectus supplement and the accompanying
prospectus may only do so in circumstances in which no obligation arises for The
Western Union Company or any of the underwriters to publish a prospectus
pursuant to Article 3 of the Prospectus Directive in relation to such offer.
Neither The Western Union Company nor the underwriters have authorized, nor do
they authorize, the making of any offer of notes in circumstances in which an
obligation arises for The Western Union Company or the underwriters to publish a
prospectus for such offer.
In relation to each Member
State of the European Economic Area which has implemented the Prospectus
Directive (each, a Relevant Member State), with effect from and including the
date on which the Prospectus Directive is implemented in that Relevant Member
State, no offer of notes which are the subject of the offering contemplated by
this prospectus supplement and the accompanying prospectus to the public may be
made in that Relevant Member State other than:
|
(a)
|
to any legal entity
which is a qualified investor as defined in the Prospectus
Directive;
|
|
|
|
(b)
|
to fewer than 150
natural or legal persons (other than qualified investors as defined in the
Prospectus Directive), as permitted under the Prospectus Directive,
subject to obtaining the prior consent of the representatives for any such
offer; or
|
|
|
|
(c)
|
in any other circumstances
falling within Article 3(2) of the Prospectus Directive,
|
provided that no such offer of
notes shall require The Western Union Company or any underwriter to publish a
prospectus pursuant to Article 3 of the Prospectus Directive.
For the purposes of this
provision, the expression an offer of notes to the public in relation to any
notes in any Relevant Member State means the communication in any form and by
any means of sufficient information on the terms of the offer and the notes to
be offered so as to enable an investor to decide to purchase or subscribe for
the notes, as the same may be varied in that Member State by any measure
implementing the Prospectus Directive in that Member State and the expression
Prospectus Directive means Directive 2003/71/EC (as amended, including by
Directive 2010/73/EU), and includes any relevant implementing measure in the
Relevant Member State.
United
Kingdom
The communication of this
prospectus supplement, the accompanying prospectus and any other document or
materials relating to the issue of the notes offered hereby is not being made,
and such documents and/or materials have not been approved, by an authorized
person for the purposes of section 21 of the United Kingdoms Financial Services
and Markets Act 2000, as amended (the FSMA). Accordingly, such documents
and/or materials are not being distributed to, and must not be passed on to, the
general public in the United Kingdom. The communication of such documents and/or
materials as a financial promotion is only being made to those persons in the
United Kingdom who have professional experience in matters relating to
investments and who fall within the definition of investment professionals (as
defined in Article 19(5) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005, as amended (the Financial Promotion Order)),
or who fall within Article 49(2)(a) to (d) of the Financial Promotion Order, or
who are any other persons to whom it may otherwise lawfully be made under the
Financial Promotion Order (all such persons together being referred to as
relevant persons). In the United Kingdom, the notes offered hereby are only
available to, and any investment or investment activity to which this prospectus
supplement and the accompanying prospectus relate will be engaged in only with,
relevant persons. Any person in the United Kingdom that is not a relevant person
should not act or rely on this prospectus supplement or the accompanying
prospectus or any of their contents.
S-36
Any invitation or inducement
to engage in investment activity (within the meaning of Section 21 of the FSMA)
in connection with the issue or sale of the notes may only be communicated or
caused to be communicated in circumstances in which Section 21(1) of the FSMA
does not apply to The Western Union Company.
All applicable provisions of
the FSMA must be complied with in respect to anything done by any person in
relation to the notes in, from or otherwise involving the United
Kingdom.
Hong Kong
The notes may not be offered
or sold in Hong Kong by means of any document other than (i) in circumstances
which do not constitute an offer to the public within the meaning of the
Companies Ordinance (Cap. 32, Laws of Hong Kong), or (ii) to professional
investors within the meaning of the Securities and Futures Ordinance (Cap. 571,
Laws of Hong Kong) and any rules made thereunder, or (iii) in other
circumstances which do not result in the document being a prospectus within
the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong) and no
advertisement, invitation or document relating to the notes may be issued or may
be in the possession of any person for the purpose of issue (in each case
whether in Hong Kong or elsewhere), which is directed at, or the contents of
which are likely to be accessed or read by, the public in Hong Kong (except if
permitted to do so under the laws of Hong Kong) other than with respect to notes
which are or are intended to be disposed of only to persons outside Hong Kong or
only to professional investors within the meaning of the Securities and
Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made
thereunder.
Japan
The notes have not been and
will not be registered under the Financial Instruments and Exchange Law of Japan
(Law No. 25 of 1948 of Japan, as amended), or FIEL, and the underwriters will
not offer or sell any securities, directly or indirectly, in Japan or to, or for
the account or benefit of, any resident of Japan (which term as used herein
means any person resident in Japan, including any corporation or other entity
organized under the laws of Japan), or to others for re-offering or resale,
directly or indirectly, in Japan or to, or for the account or benefit of, a
resident of Japan, except pursuant to an exemption from the registration
requirements of, and otherwise in compliance with, the FIEL and any other
applicable laws, regulations and ministerial guidelines of Japan.
Singapore
This prospectus supplement and
the accompanying prospectus have not been registered as a prospectus under the
Securities and Futures Act, Chapter 289 of Singapore (SFA) by the Monetary
Authority of Singapore, and the offer of the notes in Singapore is made
primarily pursuant to the exemptions under Sections 274 and 275 of the SFA.
Accordingly, this prospectus supplement, accompanying prospectus or any other
document or material in connection with the offer or sale, or invitation for
subscription or purchase, of the notes may not be circulated or distributed, nor
may the notes be offered or sold, or be made the subject of an invitation for
subscription or purchase, whether directly or indirectly, to any person in
Singapore other than (i) to an institutional investor as defined in Section 4A
of the SFA (an Institutional Investor) pursuant to Section 274 of the SFA,
(ii) to an accredited investor as defined in Section 4A of the SFA (an
Accredited Investor) or other relevant person as defined in Section 275(2) of
the SFA (a Relevant Person), or any person pursuant to Section 275(1A), and in
accordance with the conditions, specified in Section 275 of the SFA or (iii)
otherwise pursuant to, and in accordance with the conditions of, any other
applicable exemption or provision of the SFA.
S-37
It is a condition of the offer
that where the notes are subscribed for or acquired pursuant to an offer made in
reliance on Section 275 of the SFA by a Relevant Person which is:
|
(a)
|
a corporation (which
is not an Accredited Investor), the sole business of which is to hold
investments and the entire share capital of which is owned by one or more
individuals, each of whom is an Accredited Investor; or
|
|
|
|
(b)
|
a trust (where the
trustee is not an Accredited Investor), the sole purpose of which is to
hold investments and each beneficiary of the trust is an individual who is
an Accredited Investor,
|
the shares, debentures and
units of shares and debentures of that corporation and the beneficiaries rights
and interest (howsoever described) in that trust shall not be transferred within
six months after that corporation or that trust has subscribed for or acquired
the notes under Section 275 except:
|
(1)
|
to an Institutional
Investor, or an Accredited Investor or other Relevant Person, or which
arises from an offer referred to in Section 275(1A) of the SFA (in the
case of that corporation) or Section 276(4)(i)(B) of the SFA (in the case
of that trust);
|
|
|
|
(2)
|
where no
consideration is or will be given for the transfer; or
|
|
|
|
(3)
|
where the transfer is
by operation of law.
|
|
|
Canada
The notes may be sold only to
purchasers purchasing, or deemed to be purchasing, as principal that are
accredited investors, as defined in National Instrument 45-106 Prospectus
Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are
permitted clients, as defined in National Instrument 31-103 Registration
Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the
notes must be made in accordance with an exemption from, or in a transaction not
subject to, the prospectus requirements of applicable securities
laws.
Securities legislation in
certain provinces or territories of Canada may provide a purchaser with remedies
for rescission or damages if this prospectus supplement (including any amendment
thereto) contains a misrepresentation, provided that the remedies for rescission
or damages are exercised by the purchaser within the time limit prescribed by
the securities legislation of the purchasers province or territory. The
purchaser should refer to any applicable provisions of the securities
legislation of the purchasers province or territory for particulars of these
rights or consult with a legal advisor.
Pursuant to section 3A.3 of
National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters
are not required to comply with the disclosure requirements of NI 33-105
regarding underwriter conflicts of interest in connection with this
offering.
Peoples Republic of China
(excluding Hong Kong, Macau and Taiwan)
The notes are not being
offered or sold and may not be offered or sold, directly or indirectly, in the
Peoples Republic of China, or the PRC (for such purposes, not including the
Hong Kong and Macau Special Administrative Regions or Taiwan), except as
permitted by all relevant laws and regulations of the PRC.
This prospectus supplement and
the accompanying prospectus (i) have not been filed with or approved by the PRC
authorities and (ii) do not constitute an offer to sell, or the solicitation of
an offer to buy, any notes in the PRC to any person to whom it is unlawful to
make the offer of solicitation in the PRC.
S-38
The notes may not be offered,
sold or delivered, or offered, sold or delivered to any person for reoffering or
resale or redelivery, in any such case directly or indirectly (i) by means of
any advertisement, invitation, document or activity which is directed at, or the
contents of which are likely to be accessed or read by, the public in the PRC,
or (ii) to any person within the PRC, other than in full compliance with the
relevant laws and regulations of the PRC.
Investors in the PRC are
responsible for obtaining all relevant government regulatory approvals/licenses,
verification and/or registrations themselves, including, but not limited to,
those which may be required by the China Securities Regulatory Commission, the
State Administration of Foreign Exchange and/or the China Banking Regulatory
Commission, and complying with all relevant PRC laws and regulations, including,
but not limited to, all relevant foreign exchange regulations and/or securities
investment regulations.
Republic of
Korea
The notes have not been and
will not be registered under the Financial Investment Services and Capital
Markets Act and the decrees and regulations thereunder (the FSCMA) and the
notes have been and will be offered in Korea as a private placement under the
FSCMA. None of the notes may be offered, sold and delivered directly or
indirectly, or offered or sold to any person for re-offering or resale, directly
or indirectly, in Korea or to any resident of Korea except as otherwise
permitted under the applicable laws and regulations of Korea, including the
FSCMA and the Foreign Exchange Transaction Law of Korea and the decrees and
regulations thereunder (the FETL). For a period of one year from the issue
date of the notes, any acquirer of the notes who was solicited to buy the notes in Korea is
prohibited from transferring any of the notes to another person in any way other
than as a whole to one transferee. Furthermore, the purchaser of the notes shall
comply with all applicable regulatory requirements (including but not limited to
requirements under the FETL) in connection with the purchase of the
notes.
Taiwan
The notes have not been, and
will not be, registered or filed with, or approved by, the Financial Supervisory
Commission of Taiwan, the Republic of China (Taiwan) and/or other regulatory
authority of Taiwan pursuant to applicable securities laws and regulations and
may not be sold, issued or offered within the Taiwan through a public offering
or in circumstances which constitute an offer within the meaning of the Taiwan
Securities and Exchange Act or relevant laws and regulations that requires a
registration, filing or approval of the Financial Supervisory Commission of
Taiwan and/or other regulatory authority of the Taiwan. No person or entity in
Taiwan is authorized to offer, sell or distribute or otherwise intermediate the
offering of the notes or the provision of information relating to this
prospectus supplement and the accompanying prospectus.
The notes may be made
available to Taiwan resident investors outside Taiwan for purchase by such
investors outside Taiwan for purchase outside Taiwan by investors residing in
Taiwan, but may not be issued, offered sold or resold in Taiwan, unless
otherwise permitted by Taiwan laws and regulations. No subscription or other
offer to purchase the notes shall be binding on us until received and accepted
by us or any underwriter outside of Taiwan (the Place of Acceptance), and the
purchase/sale contract arising therefrom shall be deemed a contract entered into
in the Place of Acceptance.
S-39
LEGAL
MATTERS
The validity of the notes
offered by this prospectus supplement will be passed upon for us by Sidley
Austin LLP, Chicago, Illinois, and for the underwriters by Davis Polk &
Wardwell LLP, New York, New York.
EXPERTS
The consolidated financial
statements of The Western Union Company appearing in The Western Union Companys
Annual Report (Form 10-K) for the year ended December 31, 2016 (including the
schedule appearing therein), and the effectiveness of The Western Union
Companys internal control over financial reporting as of December 31, 2016 have
been audited by Ernst & Young LLP, independent registered public accounting
firm, as set forth in their reports thereon, included therein, and incorporated
herein by reference. Such consolidated financial statements are incorporated
herein by reference in reliance upon such reports given on the authority of such
firm as experts in accounting and auditing.
S-40
PROSPECTUS
THE WESTERN UNION
COMPANY
Debt
Securities
_______________
We may offer debt securities
from time to time in one or more series. We will provide specific terms of any
offering of these debt securities, together with the terms of the offering, the
initial public offering price and our net proceeds from the sale thereof, in
supplements to this prospectus. You should read this prospectus and any
prospectus supplement, as well as the documents incorporated and deemed to be
incorporated by reference in this prospectus, carefully before you
invest.
We may sell these debt
securities on a continuous or delayed basis directly, through agents, dealers or
underwriters as designated from time to time, or through a combination of these
methods. We reserve the sole right to accept, and together with any agents,
dealers and underwriters, reserve the right to reject, in whole or in part, any
proposed purchase of debt securities. If any agents, dealers or underwriters are
involved in the sale of any debt securities, the applicable prospectus
supplement will set forth any applicable commissions or discounts. Our net
proceeds from the sale of debt securities will be the initial public offering
price of those debt securities less the applicable discount, in the case of an
offering made through an underwriter, or the purchase price of those debt
securities less the applicable commission, in the case of an offering through an
agent, and, in each case, less other expenses payable by us in connection with
the issuance and distribution of those debt securities.
_______________
In reviewing this prospectus, you
should consider carefully the risks under Risk Factors beginning on page 5 of
this prospectus.
Neither the Securities and
Exchange Commission nor any state securities commission has approved or
disapproved of these securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
_______________
The date of this
prospectus is October 3, 2016
TABLE OF
CONTENTS
Prospectus
ABOUT THIS PROSPECTUS
|
1
|
WHERE YOU CAN FIND MORE INFORMATION
|
1
|
FORWARD-LOOKING STATEMENTS
|
3
|
RISK
FACTORS
|
5
|
THE WESTERN UNION COMPANY
|
6
|
USE
OF PROCEEDS
|
7
|
RATIO OF EARNINGS TO FIXED CHARGES
|
8
|
DESCRIPTION OF DEBT SECURITIES
|
9
|
PLAN OF DISTRIBUTION
|
22
|
LEGAL MATTERS
|
23
|
EXPERTS
|
23
|
ABOUT THIS
PROSPECTUS
This prospectus is part of an
automatic shelf registration statement that we filed with the Securities and
Exchange Commission, or SEC, as a well-known seasoned issuer as defined in
Rule 405 under the Securities Act of 1933, as amended, or the Securities Act.
Under the automatic shelf process, we may, over time, sell the debt securities
described in this prospectus or in any applicable prospectus supplement in one
or more offerings. The exhibits to our registration statement contain the full
text of certain agreements and other important documents we have summarized in
this prospectus. Since these summaries may not contain all the information that
you may find important in deciding whether to purchase the debt securities we
offer, you should review the full text of these documents. The registration
statement and the exhibits can be obtained from the SEC as indicated under the
heading Where You Can Find More Information.
This prospectus only provides
you with a general description of the debt securities we may offer. Each time we
sell debt securities, we will provide a prospectus supplement that contains
specific information about the terms of those debt securities. The prospectus
supplement may also add, update or change information contained in this
prospectus. You should read both this prospectus and any prospectus supplement,
together with the documents incorporated and deemed to be incorporated by
reference in this prospectus and the additional information described below
under the heading Where You Can Find More Information.
When we refer to Western
Union, the company, we, us or our in this prospectus we mean The
Western Union Company and its consolidated subsidiaries, unless the context
requires otherwise.
Our principal executive
offices are located at 12500 East Belford Avenue, Englewood, Colorado 80112. Our
main telephone number is (866) 405-5012.
WHERE YOU CAN FIND MORE
INFORMATION
We file annual, quarterly and
current reports, proxy statements and other information with the SEC. The SEC
allows us to incorporate by reference into this prospectus the information we
file with the SEC, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by reference
is considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. SEC rules
and regulations also permit us to furnish rather than file certain reports
and information with the SEC. Any such reports or information which we have
indicated or indicate in the future as being furnished shall not be deemed to
be incorporated by reference into or otherwise become a part of this prospectus,
regardless of when furnished to the SEC. We incorporate by reference the
following documents we filed with the SEC (file number 001-32903) and any future
filings that we make with the SEC under Sections 13(a), 13(c), 14, or 15(d) of
the Securities Exchange Act of 1934, as amended, or the Exchange Act, until we
or any agents or underwriters sell all of the securities:
●
|
Annual Report on Form
10-K for the year ended December 31, 2015;
|
●
|
Quarterly Reports on
Form 10-Q for the quarters ended March 31, 2016 and June 30, 2016;
and
|
●
|
Current Reports on Form
8-K filed with the SEC on April 13, 2016 and May 13,
2016.
|
We make available free of
charge most of our SEC filings through our Internet website
(www.westernunion.com) as soon as reasonably practicable after they are filed
with the SEC. You may access these SEC filings on our website. You may also
request a copy of our SEC filings at no cost, by writing or telephoning us
at:
The Western Union
Company
12500 East Belford Avenue
Englewood, Colorado 80112
Attention:
Investor Relations
Telephone (866) 405-5012
1
Our SEC filings are also
available at the SECs website at www.sec.gov. Any information on our website or
the SECs website (other than the documents listed about) is not a part of this
prospectus. You may also read and copy any documents that we file with the SEC
at the SECs public reference room at 100 F Street, N.E., Washington, D.C.
20549. You can request copies of these documents by writing to the SEC and
paying a fee for the copying cost. Please call the SEC at 1-800-SEC-0330 for
more information about the operation of the public reference room.
You should rely only on the
information contained in this prospectus or to which we have referred you. We
have not authorized any person to give any information or to make any
representation in connection with this offering other than those contained or
incorporated or deemed to be incorporated by reference in this prospectus, and,
if given or made, such information or representation must not be relied upon as
having been so authorized. This prospectus does not constitute an offer to sell
or a solicitation of an offer to buy by anyone in any jurisdiction in which such
offer or solicitation is not authorized, or in which the person is not qualified
to do so or to any person to whom it is unlawful to make such offer or
solicitation. Neither the delivery of this prospectus nor any sale hereunder
shall, under any circumstances, create any implication that there has been no
change in our affairs since the date hereof, that the information contained
herein is correct as of any time subsequent to its date, or that any information
incorporated or deemed to be incorporated by reference herein is correct as of
any time subsequent to its date.
2
FORWARD-LOOKING
STATEMENTS
This prospectus and the
materials we have filed or will file with the SEC (as well as information
included in our other written or oral statements) contain or will contain
certain statements that are forward-looking within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are not guarantees of
future performance and involve certain risks, uncertainties and assumptions that
are difficult to predict. Actual outcomes and results may differ materially from
those expressed in, or implied by, our forward-looking statements. Words such as
expects, intends, anticipates, believes, estimates, guides,
provides guidance, provides outlook and other similar expressions or future
or conditional verbs such as may, will, should, would, could, and
might are intended to identify such forward-looking statements. Readers should
not rely solely on the forward-looking statements and should consider all
uncertainties and risks discussed in the Risk Factors section and throughout
the Annual Report on Form 10-K for the year ended December 31, 2015 and those
incorporated by reference herein. The statements are only as of the date they
are made, and the Company undertakes no obligation to update any forward-looking
statement.
Possible events or factors
that could cause results or performance to differ materially from those
expressed in our forward-looking statements include the following: (i) events
related to our business and industry, such as: changes in general economic
conditions and economic conditions in the regions and industries in which we
operate, including global economic and trade downturns, or significantly slower
growth or declines in the money transfer, payment service, and other markets in
which we operate, including downturns or declines related to interruptions in
migration patterns, or non-performance by our banks, lenders, insurers, or other
financial services providers; failure to compete effectively in the money
transfer and payment service industry, including among other things, with
respect to price, with global and niche or corridor money transfer providers,
banks and other money transfer and payment service providers, including
electronic, mobile and Internet-based services, card associations, and
card-based payment providers, and with digital currencies and related protocols,
and other innovations in technology and business models; deterioration in
customer confidence in our business, or in money transfer and payment service
providers generally; our ability to adopt new technology and develop and gain
market acceptance of new and enhanced services in response to changing industry
and consumer needs or trends; changes in, and failure to manage effectively,
exposure to foreign exchange rates, including the impact of the regulation of
foreign exchange spreads on money transfers and payment transactions; any
material breach of security, including cybersecurity, or safeguards of or
interruptions in any of our systems or those of our vendors or other third
parties; cessation of or defects in various services provided to us by
third-party vendors; mergers, acquisitions and integration of acquired
businesses and technologies into our Company, and the failure to realize
anticipated financial benefits from these acquisitions, and events requiring us
to write down our goodwill; political conditions and related actions in the
United States and abroad which may adversely affect our business and economic
conditions as a whole, including interruptions of United States or other
government relations with countries in which we have or are implementing
significant business relationships with agents or clients; failure to manage
credit and fraud risks presented by our agents, clients and consumers; failure
to maintain our agent network and business relationships under terms consistent
with or more advantageous to us than those currently in place, including due to
increased costs or loss of business as a result of increased compliance
requirements or difficulty for us, our agents or their subagents in establishing
or maintaining relationships with banks needed to conduct our services;
decisions to change our business mix; changes in tax laws, or their
interpretation, and unfavorable resolution of tax contingencies; adverse rating
actions by credit rating agencies; our ability to realize the anticipated
benefits from productivity and cost-savings and other related initiatives, which
may include decisions to downsize or to transition operating activities from one
location to another, and to minimize any disruptions in our workforce that may
result from those initiatives; our ability to protect our brands and our other
intellectual property rights and to defend ourselves against potential
intellectual property infringement claims; our ability to attract and retain
qualified key employees and to manage our workforce successfully; material
changes in the market value or liquidity of securities that we hold;
restrictions imposed by our debt obligations; (ii) events related to our
regulatory and litigation environment, such as: liabilities or loss of business
resulting from a failure by us, our agents or their subagents to comply with
laws and regulations and regulatory or judicial interpretations thereof,
including laws and regulations designed to protect consumers, or detect and
prevent money laundering,
3
terrorist financing, fraud and
other illicit activity; increased costs or loss of business due to regulatory
initiatives and changes in laws, regulations and industry practices and
standards, including changes in interpretations in the United States and
globally, affecting us, our agents or their subagents, or the banks with which
we or our agents maintain bank accounts needed to provide our services,
including related to anti-money laundering regulations, anti-fraud measures,
customer due diligence, agent and subagent due diligence, registration and
monitoring requirements, and consumer protection requirements; liabilities or
loss of business and unanticipated developments resulting from governmental
investigations and consent agreements with or enforcement actions by regulators,
including those associated with compliance with or failure to comply with the
settlement agreement with the State of Arizona, as amended; the potential impact
on our business from the Dodd-Frank Wall Street Reform and Consumer Protection
Act, as well as regulations issued pursuant to it and the actions of the
Consumer Financial Protection Bureau and similar legislation and regulations
enacted by other governmental authorities related to consumer protection;
liabilities resulting from litigation, including class-action lawsuits and
similar matters, including costs, expenses, settlements and judgments; failure
to comply with regulations and evolving industry standards regarding consumer
privacy and data use and security; effects of unclaimed property laws; failure
to maintain sufficient amounts or types of regulatory capital or other
restrictions on the use of our working capital to meet the changing requirements
of our regulators worldwide; changes in accounting standards, rules and
interpretations or industry standards affecting our business; and (iii) other
events, such as: adverse tax consequences from our spin-off from First Data
Corporation; catastrophic events; and managements ability to identify and
manage these and other risks.
4
RISK
FACTORS
An investment in our debt
securities involves significant risks. Before purchasing any debt securities,
you should carefully consider and evaluate all of the information included and
incorporated by reference in this prospectus or the applicable prospectus
supplement, including the risk factors incorporated by reference herein from our
Annual Report on Form 10-K for the year ended December 31, 2015 and our
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2016 and June
30, 2016, as updated by annual, quarterly and other reports and documents we
file with the SEC after the date of this prospectus and that are incorporated by
reference herein or in the applicable prospectus supplement. Our business,
financial position, results of operations or liquidity could be adversely
affected by any of these risks.
5
THE WESTERN UNION
COMPANY
The Western Union Company is a
leader in global money movement and payment services, providing people and
businesses with fast, reliable and convenient ways to send money and make
payments around the world. The Western Union
®
brand is globally
recognized. Our services are primarily available through a network of agent
locations in more than 200 countries and territories. Each location in our agent
network is capable of providing one or more of our services.
Our business consists of the
following segments:
●
|
Consumer-to-ConsumerThe
Consumer-to-Consumer operating segment facilitates money transfers between
two consumers, primarily through a network of third-party agents. Our
multi-currency, real-time money transfer service is viewed by us as one
interconnected global network where a money transfer can be sent from one
location to another, around the world. Our money transfer services are
available for international cross-border transfers - that is, the transfer
of funds from one country to another - and, in certain countries,
intra-country transfers - that is, money transfers from one location to
another in the same country. This segment also includes money transfer
transactions that can be initiated through websites and mobile
devices.
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●
|
Consumer-to-BusinessThe
Consumer-to-Business operating segment facilitates bill payments from
consumers to businesses and other organizations, including utilities, auto
finance companies, mortgage servicers, financial service providers,
government agencies and other businesses. The significant majority of the
segments revenue was generated in the United States in the six months
ended June 30, 2016.
|
●
|
Business SolutionsThe
Business Solutions operating segment facilitates payment and foreign
exchange solutions, primarily cross-border, cross-currency transactions,
for small and medium size enterprises and other organizations and
individuals. The majority of the segments business relates to exchanges
of currency at spot rates, which enable customers to make cross-currency
payments. In addition, in certain countries, we write foreign currency
forward and option contracts for customers to facilitate future
payments.
|
All businesses that have not
been classified in the above segments are reported as Other and include our
money order and other services, in addition to costs for the review and closing
of acquisitions.
We believe that brand
strength, size and reach of our global network, convenience, reliability, and
value for the price paid for our customers have been important to the growth of
our business. As we continue to seek to meet the needs of our customers for
fast, reliable and convenient global money movement and payment services, we are
also working to enhance our services and provide our consumer and business
clients with access to an expanding portfolio of payment and other financial
services and to expand the ways our services can be accessed.
The majority of our revenue
comes from fees that consumers pay when they send money or make payments. In
certain consumer money transfer, bill payment, and Business Solutions
transactions involving different send and receive currencies, we generate
foreign exchange revenues resulting from the difference between the exchange
rate set by us to the consumer or business and the rate at which we or our
agents are able to acquire the currency.
6
USE OF
PROCEEDS
Unless otherwise specified in
a prospectus supplement accompanying this prospectus, the net proceeds from the
sale of debt securities to which this prospectus relates will be used for
general corporate purposes. General corporate purposes may include, among other
uses, repayment of debt, repurchases of stock, acquisitions, additions to
working capital, capital expenditures and investments in our subsidiaries. Net
proceeds may be invested prior to use.
7
RATIO OF EARNINGS TO FIXED
CHARGES
The following table sets forth
our ratio of earnings to fixed charges for the periods indicated:
|
Six Months
|
|
|
|
|
|
|
|
|
|
|
|
Ended June 30,
|
|
Year Ended December
31,
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
Ratio of earnings to fixed charges
|
6.1x
|
|
6.3x
|
|
6.3x
|
|
5.7x
|
|
7.6x
|
|
8.0x
|
For purposes of calculating
the ratio of earnings to fixed charges, earnings have been calculated by adding
income before income taxes, fixed charges included in the determination of
income before income taxes and distributions from equity method investments, and
then subtracting income from equity method investments. Fixed charges consist of
interest expense, and an estimated interest portion of rental expenses and
income tax contingencies, which are included as a component of income tax
expense.
Please refer to the financial
statements and financial information incorporated by reference in this
prospectus for more information relating to the foregoing. See Where You Can
Find More Information.
8
DESCRIPTION OF DEBT
SECURITIES
We will issue the debt
securities in one or more series. Debt securities will be issued under the
indenture dated as of November 17, 2006, as supplemented by the supplemental
indenture dated as of September 6, 2007, between us and Wells Fargo Bank,
National Association, as trustee, or any other indenture which we identify in a
prospectus supplement (we refer to the November 17, 2006 indenture or any such
other indenture, in each case as supplemented from time to time, as the
indenture). We have summarized below the material provisions of the indenture.
However, because this summary is not complete, it is subject to and is qualified
in its entirety by reference to the indenture. In this Description of Debt
Securities, we, us, our and similar words refer to The Western Union
Company and not any of its Subsidiaries (as defined below under Certain
Definitions).
General
The debt securities will be
our unsecured obligations and rank on a parity with our other unsecured and
unsubordinated indebtedness.
We primarily conduct our
operations through our Subsidiaries. Our rights and the rights of our creditors,
including the holders of the debt securities, to participate in the distribution
of assets of any of our Subsidiaries upon the liquidation or reorganization of
that Subsidiary or otherwise will be subject to the prior claims of the
Subsidiarys creditors, except to the extent that we may be a creditor with
recognized claims against the Subsidiary or such Subsidiary guarantees the debt
securities. As a result, the debt securities will be effectively subordinated to
existing and future liabilities of our Subsidiaries.
We may issue the debt
securities in one or more series, as authorized from time to time by our board
of directors, any committee of our board of directors or any duly authorized
officer. The indenture does not limit our ability to incur additional
indebtedness, nor does it afford holders of the debt securities protection in
the event of a highly leveraged or similar transaction involving our company.
However, the indenture provides that neither we nor any Restricted Subsidiary
may subject certain of our property or assets to any mortgage or other
encumbrance unless the debt securities are secured equally and ratably with or
prior to that other secured indebtedness. See Certain Covenants below.
Reference is made to the applicable prospectus supplement for information with
respect to any additions to, or modifications or deletions of, the events of
default or covenants described below.
We will describe in a
supplement to this prospectus the particular terms of any debt securities being
offered, any modifications of or additions to the general terms of the debt
securities and any U.S. Federal income tax considerations that may be applicable
in the case of offered debt securities. Accordingly, you should read both the
prospectus supplement relating to the particular debt securities being offered
and the general description of debt securities set forth in this prospectus
before investing.
The applicable prospectus
supplement will describe specific terms relating to the series of debt
securities being offered. These terms will include some or all of the
following:
●
|
the title of the series
of debt securities;
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●
|
the aggregate principal
amount and authorized denominations (if other than $1,000 and integral
multiples of $1,000);
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●
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the initial public
offering price;
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●
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the original issue and
stated maturity date or dates;
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●
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the interest rate
or rates (which may be fixed or floating), if any, the method by which the
rate or rates will be determined and the interest payment and regular
record dates;
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●
|
the manner and place of
payment of principal and interest, if
any;
|
9
●
|
if other than U.S.
dollars, the currency or currencies in which payment of the initial public
offering price and/or principal and interest, if any, may be
made;
|
●
|
whether (and if so, when
and at what price) we may be obligated to repurchase the debt
securities;
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●
|
whether (and if so, when
and at what price) the debt securities can be redeemed by us or the
holder;
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●
|
under what
circumstances, if any, we will pay additional amounts on the debt
securities to non-U.S. holders in respect of
taxes;
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●
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whether the debt
securities will be issued in registered or bearer form (with or without
coupons) and, if issued in the form of one or more global securities, the
depositary for such securities;
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●
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where the debt
securities can be exchanged or transferred;
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●
|
whether the debt
securities may be issued as original issue discount securities, and if so,
the amount of discount and the portion of the principal amount payable
upon declaration of acceleration of the maturity
thereof;
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●
|
whether (and if so, when
and at what rate) the debt securities will be convertible into shares of
our common stock;
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●
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whether there will be a
sinking fund;
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●
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provisions, if any, for
the defeasance of the debt securities;
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●
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any addition to, or
modification or deletion of, any events of default or covenants contained
in the indenture relating to the debt securities;
and
|
●
|
any other terms of the
series.
|
If we issue original issue
discount securities, we will also describe in the applicable prospectus
supplement the U.S. Federal income tax consequences and other special
considerations applicable to those securities.
We are not required to issue
all of the debt securities of a series at the same time, and debt securities of
the same series may vary as to interest rate, maturity and other provisions.
Unless otherwise provided, the aggregate principal amount of a series may be
increased and additional debt securities of such series may be
issued.
Denominations, Exchange,
Registration and Transfer
Unless otherwise specified in
the applicable prospectus supplement, the debt securities of any series will be
issued only as registered securities, in global or certificated form and in
denominations of $1,000 and any integral multiple thereof, and will be payable
only in U.S. dollars. For more information regarding debt securities issued in
global form, see Book-Entry, Delivery and Form below. Unless otherwise
indicated in the applicable prospectus supplement, any debt securities we issue
in bearer form will have coupons attached.
Registered debt securities of
any series will be exchangeable for other registered debt securities of the same
series in the same aggregate principal amount and having the same stated
maturity date and other terms and conditions. If so provided in the applicable
prospectus supplement, to the extent permitted by law, debt securities of any
series issued in bearer form which by their terms are registrable as to
principal and interest may be exchanged, at the option of the holders, for
registered debt securities of the same series in the same aggregate principal
amount and having the same stated maturity date and other terms and conditions,
upon surrender of those securities at the corporate trust office of the trustee
or at any other office or agency designated by us for the purpose of making any
such exchanges. Except in certain limited circumstances, debt securities issued
in bearer form with coupons surrendered for exchange must be surrendered with
all unmatured coupons and any matured coupons in default attached
thereto.
10
Upon surrender for
registration of transfer of any registered debt security of any series at the
office or agency maintained for that purpose, we will execute, and the trustee
will authenticate and deliver, in the name of the designated transferee, one or
more new registered debt securities of the same series in the same aggregate
principal amount of authorized denominations and having the same stated maturity
date and other terms and conditions. We may not impose any service charge, other
than any required tax or other governmental charge, on the transfer or exchange
of debt securities.
We are not required (i) to
issue, register the transfer of or exchange debt securities of any series during
the period from the opening of business 15 days before the day a notice of
redemption relating to debt securities of that series selected for redemption is
sent to the close of business on the day that notice is sent, or (ii) to
register the transfer of or exchange any debt security so selected for
redemption, except for the unredeemed portion of any debt security being
redeemed in part.
Payment and Paying
Agents
We will maintain in each place
of payment for those debt securities an office or agency where the debt
securities may be presented or surrendered for payment or for registration of
transfer or exchange and where holders may serve us with notices and demands in
respect of the debt securities and the indenture.
We will give prompt written
notice to the trustee of the location, and any change in the location, of such
office or agency. If we fail to maintain any required office or agency or fail
to furnish the trustee with the address of such office or agency, presentations,
surrenders, notices and demands may be made or served at the corporate trust
office of the trustee and at the principal London office of the trustee. We have
appointed the trustee as our agent to receive all presentations, surrenders,
notices and demands with respect to the applicable series of debt
securities.
Certain
Covenants
Unless otherwise specified in
the applicable prospectus supplement, the following covenants apply to the debt
securities:
Limitation on
Mortgages and Liens
. Neither we
nor any of our Restricted Subsidiaries may create or assume, except in favor of
us or one of our wholly owned Subsidiaries, any Lien upon any Principal Facility
(as defined below under Certain Definitions) without equally and ratably
securing any debt securities then outstanding. However, this limitation does not
apply to certain permitted Liens as described in the indenture,
including:
●
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purchase money mortgages
entered into within specified time limits, and Liens extending, renewing
or refunding those purchase money mortgages;
|
●
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Liens on acquired
property existing at the time of the
acquisition;
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●
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certain tax,
materialmens, mechanics and judgment Liens, Liens arising by operation
of law and other similar Liens;
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●
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Liens in connection with
certain government contracts;
|
●
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certain Liens in favor
of any state or local government or governmental agency in connection with
certain tax-exempt financings;
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●
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Liens in connection with
workers compensation, unemployment insurance, other social security
benefits or other insurance related obligations and Liens on the proceeds
of the foregoing;
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●
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deposits to secure the
performance of bids, certain trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds, judgment and like
bonds and similar bonds and other obligations of like nature incurred in
the ordinary course of
business;
|
11
●
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zoning restrictions,
easements, rights-of-way and similar encumbrances incurred in the ordinary
course of business and minor irregularities of title, which do not
materially interfere with the ordinary conduct of our business or our
Subsidiaries taken as a whole;
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●
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Liens on Purchased
Receivables and related assets granted in connection with one or more
Purchased Receivables Financing;
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●
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Liens to secure the cost
of construction or improvement of any property entered into within
specified time limits; and
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●
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Liens not otherwise
permitted if the sum of the indebtedness secured by those Liens plus the
aggregate sales price of property involved in sale and leaseback
transactions referred to in the first bullet point under Limitation on
Sale and Leaseback Transactions below, does not exceed the greater of
$300 million or 15% of our Consolidated Net Worth (as defined below under
Certain Definitions).
|
Limitation on Sale and
Leaseback Transactions
. Neither
we nor any of our Subsidiaries may sell any Principal Facility owned on the date
of the indenture with the intention of taking back a lease of that facility for
a period of more than 36 months other than certain computer hardware leases,
unless:
●
|
the sum of the aggregate
sale price of property involved in sale and leaseback transactions not
otherwise permitted plus the aggregate amount of indebtedness secured by
Liens referred to in the last bullet point above under Limitation on
Mortgages and Liens does not exceed the greater of $300 million or 15% of
our Consolidated Net Worth;
|
●
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the sale and leaseback
transaction is entered into between us and one or more of our Subsidiaries
or between our Subsidiaries; or
|
●
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the net proceeds of the
sale or the fair market value of the Principal Facility, whichever is
greater (which may be conclusively determined by our board of directors,
any authorized committee thereof or any of our duly authorized officers),
are applied within 120 days to the optional retirement of debt securities
then outstanding or to the optional retirement of our other Funded Debt
(as defined below under Certain Definitions) ranking on a parity with
the debt securities;
provided
, that the
amount required to be applied to the retirement of outstanding debt
securities or our Funded Debt pursuant to this bullet point shall be
reduced by the principal amount of any debt securities or of our Funded
Debt voluntarily retired by us within 120 days after such sale, whether or
not any such retirement of the debt securities or Funded Debt shall be
specified as being made pursuant to this bullet
point.
|
Covenant to File
Reports
. We will file with the
trustee, within 15 days after we have filed with the SEC, copies of the annual
reports and of the information, documents, and other reports which we have so
filed with the SEC pursuant to Section 13 or Section 15(d) of the Exchange
Act.
Merger or
Consolidation
We may not consolidate with or
merge into any other entity or sell, lease, convey, assign, transfer or
otherwise dispose of our properties and assets substantially as an entirety or
as an entirety to any person, unless:
●
|
we are the survivor
formed by or resulting from such consolidation or
merger;
|
●
|
the surviving or
successor entity is a domestic entity and expressly assumes, by
supplemental indenture, all of our obligations under the
indenture;
|
●
|
immediately after
completion of the transaction, no Event of Default, and no event which,
after notice or lapse of time, or both, would become an Event of Default,
has occurred and is
continuing;
|
12
●
|
if, as a result of the
transaction, our properties or assets would become subject to a Lien
covered by the provisions described above under Certain
CovenantsLimitation on Mortgages and Liens, and none of the exceptions
therein apply, we or the surviving or successor entity takes such steps as
are necessary to effectively secure all debt securities equally and
ratably with (or prior to) all indebtedness secured by such Lien;
and
|
●
|
we deliver to the
trustee an officers certificate and an opinion of counsel each stating
that the transaction and any supplemental indenture comply with the
indenture provisions and that all conditions precedent in the indenture
relating to such transaction have been complied
with.
|
For purposes of this covenant,
the sale, lease, conveyance, assignment, transfer, or other disposition of the
properties and assets substantially as an entirety or as an entirety of one or
more of our Subsidiaries, which properties and assets, if held by us instead of
such Subsidiary or Subsidiaries, would constitute our properties and assets
substantially as an entirety or as an entirety on a consolidated basis, shall be
deemed to be the transfer of our properties and assets substantially as an
entirety or as an entirety.
Events of
Default
Event of Default means, with
respect to a series of debt securities, any of the following events:
●
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failure to pay interest
on the debt securities of such series, which failure continues for a
period of 30 days after payment is due;
|
●
|
failure to make any
principal or premium payment on the debt securities of such series when
due;
|
●
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failure to perform or
comply with any other covenant or warranty in the indenture with respect
to the debt securities of such series for a period of 90 days after notice
to us of such failure by (i) the trustee or (ii) the holders of at least
25% in principal amount of the outstanding debt securities of such
series;
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●
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default under any
Indebtedness of us or our Restricted Subsidiaries in an aggregate
principal amount of $100 million or more and which default (i) constitutes
a failure to make any scheduled principal or interest payment when due
after giving effect to any applicable grace period or (ii) accelerates the
payment of such debt and such acceleration is not rescinded or annulled,
or such debt is not discharged, within 15 days after notice to us of such
default by (i) the trustee or (ii) the holders of at least 25% in
principal amount of the outstanding debt securities of such
series;
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●
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the entry against us or
our Restricted Subsidiaries of one or more final judgments, decrees or
orders by a court for the payment of money aggregating in excess of $100
million, which judgment, decree or order is not paid, discharged or stayed
for any period of 45 consecutive days or, in the case of a foreign
judgment not being sought in the United States, 60 consecutive days, after
the amount thereof is due;
provided
,
however
, that such amount is calculated after
deducting certain insurance coverage;
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●
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certain events of
bankruptcy, insolvency or reorganization of our company;
and
|
●
|
any other event of
default provided with respect to debt securities of such series pursuant
to the indenture.
|
In general, the trustee is
required to give notice of a default known to it with respect to a series of
debt securities to the holders of debt securities of such series within 90 days
after it occurs. However, the trustee may withhold notice of any default (except
a default in payment of principal or interest on any debt security of such
series) if the trustee determines it is in the interest of the holders of debt
securities of such series to do so.
Our failure to comply with
Section 314(a) of the Trust Indenture Act of 1939, as amended (relating to the
filing of reports, information and other documents with the SEC), shall not
constitute a Default or an Event of Default with respect to any series of debt
securities.
13
If there is a continuing Event
of Default with respect to a series of debt securities, then the trustee or the
holders of at least 25% in principal amount of the debt securities of such
series may require us to repay the principal amount on the debt securities of
such series immediately. Upon payment of the principal or other specified
amount, our obligations in respect of the payment of principal of the debt
securities of such series will terminate.
Subject to the provisions of
the indenture relating to the duties of the trustee, in the case of a continuing
Event of Default with respect to a series of debt securities, the trustee may
refuse to exercise any of its rights or powers under the indenture with respect
to such series of debt securities at the request, order or direction of any of
the holders of debt securities of such series unless it first receives
reasonable indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request, order or direction. Subject to
this limitation, the holders of a majority in principal amount of the
outstanding debt securities of the affected series will have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the trustee under the indenture with respect to such series of debt
securities or exercising any trust or power conferred on the trustee with
respect to the debt securities of such series.
At any time before a judgment
or decree for payment of money due has been obtained by the trustee as provided
in the indenture following a declaration of acceleration with respect to a
series of debt securities, the holders of a majority in principal amount of the
outstanding debt securities of such series may rescind and annul such
declaration and its consequences if:
●
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we have paid or
deposited with the trustee a sum sufficient to pay (i) all overdue
installments of interest or other payments with respect to coupons on all
the debt securities of such series, (ii) the principal of, premium, if
any, and interest on any debt securities of such series which have become
due otherwise than by such declaration of acceleration, (iii) to the
extent that such payment is lawful, interest on overdue installments of
interest or other payments with respect to coupons on each debt security
of such series at a rate established for such series, and (iv) all sums
paid or advanced by the trustee and the reasonable compensation, expenses,
disbursements and advances of the trustee, its agents and counsel;
and
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●
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all events of default
with respect to the debt securities of such series, other than the
nonpayment of principal which has become due solely by such declaration of
acceleration, have been cured or waived as provided in the
indenture.
|
No such rescission and
annulment will affect any subsequent default or impair any right consequent
thereon.
We are required to provide the trustee with an officers certificate
each fiscal year stating whether or not we have complied with all conditions and
covenants under the indenture.
Modification or
Waiver
We and the trustee may, at any
time and from time to time, amend the indenture without the consent of the
holders of outstanding debt securities for any of the following
purposes:
●
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to effect the assumption
of our obligations under the indenture by a successor
corporation;
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●
|
to impose additional
covenants and events of default for the benefit of the holders of any
series of debt securities;
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●
|
to add or change any of
the provisions of the indenture relating to the issuance or exchange of
debt securities of any series in registered form, but only if such action
does not adversely affect the interests of the holders of outstanding debt
securities of such series or related coupons in any material
respect;
|
14
●
|
to change or eliminate
any of the provisions of the indenture, but only if the change or
elimination becomes effective when there is no outstanding debt security
of any series or related coupon which is entitled to the benefit of such
provision and as to which such modification would
apply;
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●
|
to secure the debt
securities;
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●
|
to supplement any of the
provisions of the indenture to permit or facilitate the defeasance and
discharge of any series of debt securities, but only if such action does
not adversely affect the interests of the holders of outstanding debt
securities of any series or related coupons in any material
respect;
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●
|
to establish the form or
terms of the debt securities and coupons, if any, of any series as
permitted by the indenture;
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●
|
to evidence and provide
for the acceptance of appointment by a successor trustee and to add to or
change any of the provisions of the indenture to facilitate the
administration of the trusts by more than one trustee;
and
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to correct any mistakes
or defects in the indenture, but only if such action does not adversely
affect the interests of the holders of outstanding debt securities of any
series or related coupons in any material respect or to otherwise amend
the indenture in any respect that does not adversely affect the holders of
outstanding debt securities.
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In addition, we and the
trustee may modify the indenture and the debt securities of any series with the
consent of the holders of not less than a majority in principal amount of each
series of outstanding debt securities affected by such modification to add,
change or eliminate any provision of, or to modify the rights of holders of debt
securities of such series under, the indenture. But we may not take any of the
following actions without the consent of each holder of outstanding debt
securities affected thereby:
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change the stated
maturity of the principal of, or any installment of interest on, the debt
securities of any series or related coupon, reduce the principal amount
thereof, the interest thereon or any premium payable upon redemption
thereof, or change the currency or currencies in which the principal,
premium or interest is denominated or payable;
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reduce the amount of, or
impair the right to institute suit for the enforcement of, any payment on
the debt securities of any series following maturity
thereof;
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reduce the percentage in
principal amount of outstanding debt securities of any series required for
consent to any waiver of defaults or compliance with certain provisions of
the indenture; or
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modify any provision of
the indenture relating to modifications and waivers of defaults and
covenants, except to increase any such percentage or to provide that
certain other provisions cannot be modified or waived without the consent
of each holder of outstanding debt securities affected
thereby.
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A modification with respect to
one or more particular series of debt securities and related coupons, if any,
will not affect the rights under the indenture of the holders of debt securities
of any other series and related coupons, if any.
The holders of a majority in
principal amount of the outstanding debt securities of all series affected may,
on behalf of the holders of all debt securities of such series, waive any past
default under the indenture with respect to the debt securities of such series,
except a default (i) in the payment of principal of, premium, if any, or
interest on such series or (ii) in respect of a covenant or provision which, as
described above, cannot be modified or amended without the consent of each
holder of debt securities of such series. Upon any such waiver, the default will
cease to exist with respect to the debt securities of such series and any Event
of Default arising therefrom will be deemed to have been cured for every purpose
of the debt securities of such series under the indenture, but the waiver will
not extend to any subsequent or other default or impair any right consequent
thereon.
15
We may elect in any particular
instance not to comply with certain covenants set forth in the indenture or the
debt securities of any series (except as otherwise provided in the covenants
described above under Certain Covenants) if, before the time for such
compliance, the holders of at least a majority in principal amount of the
outstanding debt securities of such series either waive compliance in that
instance or generally waive compliance with those provisions, but the waiver may
not extend to or affect any term, provision or condition except to the extent
expressly so waived, and, until the waiver becomes effective, our obligations
and the duties of the trustee in respect of any such provision will remain in
full force and effect.
Discharge, Legal Defeasance
and Covenant Defeasance
We may be discharged from all
of our obligations with respect to the outstanding debt securities of any series
(except as otherwise provided in the indenture) when:
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either (i) all the debt
securities of such series and related coupons, if any, have been delivered
to the trustee for cancellation, or (ii) all the debt securities of such
series and related coupons, if any, not delivered to the trustee for
cancellation:
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have become due and
payable;
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will become due and
payable at their stated maturity within one year;
or
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are to be called for
redemption within one year under arrangements satisfactory to the trustee
for the giving of notice by the trustee; and we, in the case of clause
(ii), have irrevocably deposited or caused to be deposited with the
trustee, in trust, an amount in U.S. dollars sufficient for payment of all
principal of, premium, if any, and interest on those debt securities when
due or to the date of deposit, as the case may be;
provided
,
however
, in the
event a petition for relief under any applicable federal or state
bankruptcy, insolvency or other similar law is filed with respect to our
company within 91 days after the deposit and the trustee is required to
return the deposited money to us, our obligations under the indenture with
respect to those debt securities will not be deemed terminated or
discharged;
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we have paid or caused
to be paid all other sums payable by us under the
indenture;
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we have delivered to the
trustee an officers certificate and an opinion of counsel each stating
that all conditions precedent relating to the satisfaction and discharge
of the indenture with respect to such series of debt securities have been
complied with; and
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we have delivered to the
trustee an opinion of counsel of recognized standing in respect of U.S.
federal income tax matters or a ruling of the Internal Revenue Service to
the effect that holders of debt securities of such series will not
recognize income, gain or loss for U.S. federal income tax purposes as a
result of such deposit and
discharge.
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We may elect (i) to be
discharged from our obligations with respect to the outstanding debt securities
of any series (except as otherwise specified in the indenture) or (ii) to be
released from our obligation to comply with the provisions of the indenture
described above under Certain Covenants and under Merger or Consolidation
with respect to the outstanding debt securities of any series (and, if so
specified, any other obligation or restrictive covenant added for the benefit of
the holders of such series of debt securities), in either case, if we satisfy
each of the following conditions:
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we deposit or cause to be
deposited irrevocably with the trustee, in trust, specifically pledged as
security for, and dedicated solely to, the benefit of the holders of debt
securities of such series money or the equivalent in U.S. government securities,
or any combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification delivered to the trustee, for payment of all principal of,
premium, if any, and interest on the outstanding debt securities of such series
when due;
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such deposit does not
cause the trustee with respect to the debt securities of such series to
have a conflicting interest with respect to the debt securities of such
series;
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such deposit will not
result in a breach or violation of, or constitute a default under, the
indenture or any other agreement or instrument to which we are a party or
by which we are bound;
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on the date of such
deposit, there is no continuing Event of Default with respect to the debt
securities of such series or event (including such deposit) which, with
notice or lapse of time or both, would become an Event of Default with
respect to the debt securities of such series and, with respect to the
option under clause (i) above only, no Event of Default with respect to
such series under the provisions of the indenture relating to certain
events of bankruptcy or insolvency or event which, with notice or lapse of
time or both, would become an Event of Default with respect to such series
under such bankruptcy or insolvency provisions shall have occurred and be
continuing on the 91st day after such date; and
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we deliver to the
trustee an opinion of counsel of recognized standing in respect of U.S.
federal income tax matters or a ruling of the Internal Revenue Service to
the effect that the holders of debt securities of such series will not
recognize income, gain or loss for U.S. federal income tax purposes as a
result of such deposit, defeasance or
discharge.
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Notwithstanding the foregoing,
if we exercise our option under clause (ii) above and an Event of Default with
respect to such series of debt securities under the provisions of the indenture
relating to certain events of bankruptcy or insolvency or event which, with
notice or lapse of time or both, would become an Event of Default with respect
to such series of debt securities under such bankruptcy or insolvency provisions
shall have occurred and be continuing on the 91st day after the date of such
deposit, our obligation to comply with the provisions of the indenture described
above under Certain Covenants and under Merger or Consolidation with
respect to those debt securities will be reinstated.
Conversion
Rights
We will describe in the
applicable prospectus supplement the particular terms and conditions, if any, on
which debt securities may be convertible into shares of our common stock. These
terms will include the conversion price, the conversion period, provisions as to
whether conversion will be at our option or the option of the holder, events
requiring an adjustment of the conversion price and provisions affecting
conversion in the event of the redemption of the debt securities.
The Trustee Under the
Indenture
We maintain ordinary banking
relationships and, from time to time, obtain credit facilities and lines of
credit with a number of banks, including the trustee, Wells Fargo Bank, National
Association.
Book-Entry, Delivery and
Form
We may issue the debt
securities of a series in whole or in part in global form that we will deposit
with, or on behalf of, a depositary identified in the applicable prospectus
supplement. Global securities may be issued in either registered or bearer form
and in either temporary or permanent form. We will make payments of principal
of, and premium, if any, and interest on debt securities represented by a global
security to the trustee and then by the trustee to the depositary.
We anticipate that any global
securities will be deposited with, or on behalf of, The Depository Trust Company
(DTC), New York, New York, and will be registered in the name of DTCs
nominee, and that the following provisions will apply to the depositary
arrangements with respect to any global securities. We will describe additional
or differing terms of the depositary arrangements in the prospectus supplement
relating to a particular series of debt securities issued in the form of global
securities.
17
Upon the issuance of a
registered global security, the depositary will credit, on its book-entry
registration and transfer system, the participants accounts with the respective
principal or face amounts of the debt securities beneficially owned by the
participants. Any dealers, underwriters or agents participating in the
distribution of the debt securities will designate the accounts to be credited.
Ownership of beneficial interests in a registered global security will be shown
on, and the transfer of ownership interests will be effected only through,
records maintained by the depositary, with respect to interests of participants,
and on the records of participants, with respect to interests of persons holding
through participants.
So long as the depositary, or
its nominee, is the registered owner of a registered global security, that
depositary or its nominee, as the case may be, will be considered the sole owner
or holder of the debt securities represented by the registered global security
for all purposes under the indenture. Except as described below, owners of
beneficial interests in a registered global security will not be entitled to
have the debt securities represented by the registered global security
registered in their names, will not receive or be entitled to receive physical
delivery of the debt securities in definitive form and will not be considered
the owners or holders of the debt securities under the indenture. Accordingly,
each person owning a beneficial interest in a registered global security must
rely on the procedures of the depositary for that registered global security
and, if that person is not a participant, on the procedures of the participant
through which the person owns its interest, to exercise any rights of a holder
under the indenture. The laws of some states may require that some purchasers of
securities take physical delivery of those securities in definitive form. Such
laws may impair the ability to transfer beneficial interests in a global
security.
To facilitate subsequent
transfers, all debt securities deposited by participants with DTC are registered
in the name of DTCs nominee, Cede & Co. The deposit of the debt securities
with DTC and their registration in the name of Cede & Co. effect no change
in beneficial ownership. DTC has no knowledge of the actual beneficial owners of
the debt securities. DTCs records reflect only the identity of the direct
participants to whose accounts such debt securities are credited, which may or
may not be the beneficial owners. The participants will remain responsible for
keeping account of their holdings on behalf of their customers.
We will make payments due on
the debt securities to Cede & Co., as nominee of DTC, in immediately
available funds. DTCs practice upon receipt of any payment of principal,
premium, interest or other distribution of underlying securities or other
property to holders on that registered global security, is to immediately credit
participants accounts in amounts proportionate to their respective beneficial
interests in that registered global security as shown on the records of the
depositary. Payments by participants to owners of beneficial interests in a
registered global security held through participants will be governed by
standing customer instructions and customary practices, as is now the case with
the securities held for the accounts of customers in bearer form or registered
in street name, and will be the responsibility of those participants. Payment
to Cede & Co. is our responsibility. Disbursement of such payments to direct
participants is the responsibility of Cede & Co. Disbursement of such
payments to the beneficial owners is the responsibility of direct and indirect
participants.
Neither we nor the trustee nor
any other agent of ours or any agent of the trustee will have any responsibility
or liability for any aspect of the records relating to payments made on account
of beneficial ownership interests in the registered global security or for
maintaining, supervising or reviewing any records relating to those beneficial
ownership interests.
We expect that DTC will take
any action permitted to be taken by a holder of securities (including the
presentation of securities for exchange as described below) only at the
direction of one or more participants to whose account the DTC interests in a
global security are credited and only in respect of such portion of the
aggregate principal amount of the securities as to which such participant or
participants has or have given such direction. However, if there is an Event of
Default under the debt securities, DTC will exchange each global security for
definitive securities, which it will distribute to its participants.
18
If the depositary for any of
the debt securities represented by a registered global security is at any time
unwilling or unable to continue as depositary or ceases to be a clearing agency
registered under the Exchange Act, and a successor depositary registered as a
clearing agency under the Exchange Act is not appointed by the obligor within 90
days, the obligor will issue debt securities in definitive form in exchange for
the registered global security that had been held by the depositary. Any debt
securities issued in definitive form in exchange for a registered global
security will be registered in the name or names that the depositary gives to
the trustee or other relevant agent of the obligor or trustee. It is expected
that the depositarys instructions will be based upon directions received by the
depositary from participants with respect to ownership of beneficial interests
in the registered global security that had been held by the depositary. In
addition, we may at any time determine that the debt securities of any series
shall no longer be represented by a global security and will issue securities in
definitive form in exchange for such global security pursuant to the procedure
described above.
DTC 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. DTC was created to hold securities of its
participants and to facilitate the clearance and settlement of securities
transactions, such as transfers and pledges, among its participants in such
securities through electronic computerized book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. DTCs participants include securities brokers and dealers
(including the initial purchasers), banks, trust companies, clearing
corporations and certain other organizations, some of whom own DTC. Access to
DTCs book-entry system is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly. The rules
applicable to DTC and its participants are on file with the SEC.
The information in this
prospectus concerning DTC and DTCs book-entry system has been obtained from
sources that we believe to be reliable, but we take no responsibility for its
accuracy or completeness. We assume no responsibility for the performance by DTC
or its participants of their respective obligations, including obligations that
they have under the rules and procedures that govern their
operations.
Certain
Definitions
We have summarized below
certain defined terms as used in the indenture (except Financing Lease, which
will be defined in the applicable debt security). We refer you to the indenture
for the full definition of these terms.
Business Day means any day
other than a Saturday or a Sunday or a day on which banking institutions in New
York City are authorized or required by law or executive order to remain
closed.
Consolidated Net Assets
means the gross book value of the assets of us and our Subsidiaries (which under
GAAP would appear on the consolidated balance sheet of us and our Subsidiaries)
less all reserves (including, without limitation, depreciation, depletion and
amortization) applicable thereto and less (i) minority interests and (ii)
liabilities which, in accordance with their terms, will be settled within one
year after the date of determination.
Consolidated Net Income
means the net income of us and our Subsidiaries (which under GAAP would appear
on the consolidated income statement of us and our Subsidiaries), excluding,
however, (i) any equity of us or a Subsidiary in the unremitted earnings of any
corporation which is not a Subsidiary, (ii) gains from the writeup in the book
value of any asset and (iii) in the case of an acquisition of any Person which
is accounted for on a purchase basis, earnings of such Person prior to its
becoming a Subsidiary.
19
Consolidated Net Worth means
the sum of (i) the par value (or value stated on the books of such corporation)
of the capital stock of all classes of us and our Subsidiaries, plus (or minus
in the case of a deficit), (ii) the amount of the consolidated surplus, whether
capital or earned, of us and our Subsidiaries, and plus (or minus in the case of
a deficit) and (iii) retained earnings of us and our Subsidiaries, all as
determined in accordance with GAAP;
provided
,
however
, that Consolidated Net Worth shall exclude the effects of currency
translation adjustments and the application of Statement of Financial Accounting
Standards Codification Topic 320 InvestmentsDebt and Equity
Securities.
Financing Lease means any
lease of property, real or personal, the obligations of the lessee in respect of
which are required in accordance with GAAP as it exists on the date that we
specify in the applicable debt security to be capitalized on a balance sheet of
the lessee.
Funded Debt means any
indebtedness for money borrowed, created, issued, incurred, assumed or
guaranteed which, in accordance with its terms, will be settled beyond one year
after the date of determination, but in any event including all indebtedness for
money borrowed, whether secured or unsecured, maturing more than one year, or
extendible at the option of the obligor to a date more than one year, after the
date of determination thereof (excluding any liabilities which, in accordance
with their terms, will be settled within one year after the date of
determination).
GAAP means, as to a
particular Person, such accounting principles as, in the opinion of the
independent public accountants regularly retained by such Person, conform at the
time to United States generally accepted accounting principles.
Governmental Authority means
any nation or government, any state or other political subdivision thereof and
any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
Indebtedness of any Person
means, at any date and without duplication, (a) all indebtedness of such Person
for borrowed money or for the deferred purchase price of property or services
(other than trade liabilities not more than 60 days past due incurred in the
ordinary course of business and payable in accordance with customary practices
or endorsements for the purpose of collection in the ordinary course of business
and excluding the deferred purchase price of property or services to be repaid
through earnings of the purchaser to the extent such amount is not characterized
as indebtedness in accordance with GAAP), (b) any other indebtedness of such
Person which is evidenced by a note, bond, debenture or similar instrument, (c)
all obligations of such Person under Financing Leases, (d) all payment
obligations of such Person in respect of acceptances issued or created for the
account of such Person and (e) all liabilities secured by any Lien on any
property owned by such Person even though such Person has not assumed or
otherwise become liable for the payment thereof;
provided
that, if such Person has not assumed or otherwise become liable in
respect of such indebtedness, such obligations shall be deemed to be in an
amount equal to the lesser of (i) the amount of such indebtedness and (ii) the
book value of the property subject to such Lien at the time of determination.
For the purposes of this definition, the following shall not constitute
Indebtedness: the issuance of payment instruments, consumer funds transfers, or
other amounts paid to or received by us, any of our Subsidiaries or any agent
thereof in the ordinary course of business in order for us or such Subsidiary to
make further distribution to a third party, to the extent payment in respect
thereof has been received by us, such Subsidiary or any agent
thereof.
20
Lien means any mortgage,
pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other), charge or other security interest or any preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, any conditional sale or other
title retention agreement and any Financing Lease having substantially the same
economic effect as any of the foregoing), it being understood that the holding
of money or investments for the purpose of honoring payment instruments or
consumer funds transfers, or other amounts paid to or received by us, any of our
Subsidiaries, or any agent thereof in the ordinary course of business in order
for us or any of Subsidiaries to make further distributions to a third party,
shall not be considered a Lien for the purposes of this definition.
Person means an individual,
corporation, partnership, joint venture, association, joint stock company,
trust, unincorporated organization, Governmental Authority or other entity of
whatever nature.
Principal Facility means the
real property, fixtures, machinery and equipment relating to any facility owned
by us or any Subsidiary, except any facility that, in the opinion of our board
of directors, any duly authorized committee thereof or any of our duly
authorized officers is not of material importance to the business conducted by
us and our Subsidiaries, taken as a whole.
Purchased Receivables means
accounts receivable purchased by us or any of our Subsidiaries from third
parties and not originally created by the sale of goods or services by us or any
of our Subsidiaries.
Purchased Receivables
Financing means any financing transaction pursuant to which Purchased
Receivables are sold, transferred, securitized or otherwise financed by any
Receivables Subsidiary and as to which there is no recourse to us or any of our
other Subsidiaries (other than customary representations and warranties made in
connection with the sale or transfer of Purchased Receivables).
Receivables Subsidiary means
any Subsidiary which purchases Purchased Receivables directly or to which
Purchased Receivables are transferred by us or any of our Subsidiaries, in
either case with the intention of engaging in a Purchased Receivables
Financing.
Restricted Subsidiary means
at any date, (a) any Subsidiary of ours which, together with its Subsidiaries,
(i) has a proportionate share of Consolidated Net Assets that exceeds 10% at the
time of determination or (ii) has equity in the Consolidated Net Income that
exceeds 10% for the period of the four most recently completed fiscal quarters
preceding the time of determination or (b) any wholly-owned Subsidiary of ours
that at the time of determination shall be designated a Restricted Subsidiary by
our board of directors or any duly authorized committee thereof or any of our
duly authorized officers (any wholly-owned Subsidiary of ours designated as a
Restricted Subsidiary pursuant to this clause (b) is referred to as a
Designated Restricted Subsidiary). At any time, our board of directors or any
duly authorized committee thereof or any of our duly authorized officers may
designate any Designated Restricted Subsidiary to no longer be a Restricted
Subsidiary so long as (i) such Subsidiary is not a Restricted Subsidiary
pursuant to clause (a) above and (ii) immediately after giving effect to such
designation, no Event of Default shall have occurred and be
continuing.
Subsidiary means as to any
Person, a corporation, partnership or other entity of which shares of stock or
other ownership interests having ordinary voting power (other than stock or such
other ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, directly or
indirectly through one or more intermediaries, or both, by such Person. Unless
otherwise qualified, all references to a Subsidiary or to Subsidiaries shall
refer to a Subsidiary or Subsidiaries of ours.
21
PLAN OF
DISTRIBUTION
We may sell debt securities
offered by this prospectus in and/or outside the United States:
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through underwriters or
dealers;
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through agents;
or
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directly to
purchasers.
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We will describe in a
prospectus supplement the particular terms of any offering of debt securities,
including the following:
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the names of any
underwriters or agents;
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the proceeds we will
receive from the sale;
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any discounts and other
items constituting underwriters or agents
compensation;
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any discounts or
concessions allowed or reallowed or paid to dealers;
and
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any securities exchanges
on which the applicable debt securities may be
listed.
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If we use underwriters in the
sale, such underwriters will acquire the debt securities for their own account.
The underwriters may resell the debt securities in one or more transactions, at
a fixed price or prices, which may be changed, or at market prices prevailing at
the time of sale, at prices relating to prevailing market prices or at
negotiated prices.
The debt securities may be
offered to the public through underwriting syndicates represented by managing
underwriters or by underwriters without a syndicate. The obligations of the
underwriters to purchase the debt securities will be subject to certain
conditions. The underwriters will be obligated to purchase all the debt
securities of the series offered if any of the debt securities are
purchased.
We may sell debt securities
through agents or dealers designated by us. Any agent or dealer involved in the
offer or sale of the debt securities for which this prospectus is delivered will
be named, and any commissions payable by us to that agent or dealer will be set
forth, in the prospectus supplement. Unless indicated in the prospectus
supplement, the agents will agree to use their reasonable efforts to solicit
purchases for the period of their appointment and any dealer will purchase debt
securities from us as principal and may resell those debt securities at varying
prices to be determined by the dealer.
We also may sell debt
securities directly. In this case, no underwriters or agents would be
involved.
Underwriters, dealers and
agents that participate in the distribution of the debt securities may be
underwriters as defined in the Securities Act, and any discounts or commissions
received by them from us and any profit on the resale of the debt securities by
them may be treated as underwriting discounts and commissions under the
Securities Act.
We may have agreements with
the underwriters, dealers and agents to indemnify them against certain civil
liabilities, including liabilities under the Securities Act or to contribute
with respect to payments which the underwriters, dealers or agents may be
required to make.
Underwriters, dealers and
agents may engage in transactions with, or perform services for, us or our
subsidiaries in the ordinary course of their businesses.
22
In order to facilitate the
offering of the debt securities, any underwriters or agents, as the case may be,
involved in the offering of such securities may engage in transactions that
stabilize, maintain or otherwise affect the price of such securities or other
securities the prices of which may be used to determine payments on the
securities. Specifically, the underwriters or agents, as the case may be, may
overallot in connection with the offering, creating a short position in such
securities for their own account. In addition, to cover overallotments or to
stabilize the price of the securities or of such other securities, the
underwriters or agents, as the case may be, may bid for, and purchase, such
securities in the open market. Finally, in any offering of such securities
through a syndicate of underwriters, the underwriting syndicate may reclaim
selling concessions allotted to an underwriter or a dealer for distributing such
securities in the offering if the syndicate repurchases previously distributed
securities in transactions to cover syndicate short positions, in stabilization
transactions or otherwise. Any of these activities may stabilize or maintain the
market price of the securities above independent market levels. The underwriters
or agents, as the case may be, are not required to engage in these activities,
and may end any of these activities at any time.
We may solicit offers to
purchase debt securities directly from, and we may sell debt securities directly
to, institutional investors or others. The terms of any of those sales,
including the terms of any bidding or auction process, if utilized, will be
described in the applicable prospectus supplement.
Some or all of the debt
securities may be new issues of securities with no established trading market.
We cannot and will not give any assurances as to the liquidity of the trading
market for any of our securities.
LEGAL
MATTERS
The validity of the debt
securities and certain other matters will be passed upon for us by Sidley Austin
LLP, Chicago, Illinois.
EXPERTS
The consolidated financial
statements of The Western Union Company appearing in The Western Union Companys
Annual Report (Form 10-K) for the year ended December 31, 2015, and the
effectiveness of The Western Union Companys internal control over financial
reporting as of December 31, 2015 have been audited by Ernst & Young LLP,
independent registered public accounting firm, as set forth in their reports
thereon, included therein, and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such reports given on the authority of such firm as experts in
accounting and auditing.
With respect to the unaudited
condensed consolidated interim financial information of The Western Union
Company for the three-month periods ended March 31, 2016 and 2015 and the
three-month and six-month periods ended June 30, 2016 and 2015, incorporated by
reference in this prospectus, Ernst & Young LLP reported that they have
applied limited procedures in accordance with professional standards for a
review of such information. However, their separate reports dated May 3, 2016
and August 3, 2016, included in The Western Union Companys Quarterly Reports on
Form 10-Q for the quarters ended March 31, 2016 and June 30, 2016, respectively,
and incorporated by reference herein, state that they did not audit and they do
not express an opinion on that interim financial information. Accordingly, the
degree of reliance on their reports on such information should be restricted in
light of the limited nature of the review procedures applied. Ernst & Young
LLP is not subject to the liability provisions of Section 11 of the Securities
Act for their report on the unaudited interim financial information because that
report is not a report or a part of the registration statement prepared or
certified by Ernst & Young LLP within the meaning of Sections 7 and 11 of
the Securities Act.
23
$400,000,000
3.600%
Notes due
2022
____________________
PROSPECTUS
SUPPLEMENT
____________________
Joint Book-Running
Managers
Barclays
BofA Merrill Lynch
Citigroup
Co-Managers
BNY Mellon Capital Markets, LLC
US Bancorp
CIBC Capital Markets
Credit Suisse
Fifth Third Securities
J.P. Morgan
Scotiabank
March 8
, 2017
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