On February 7, 2018, McKesson Corporation (the Company)
entered into an Underwriting Agreement (the Euro Notes Underwriting Agreement) with the several underwriters named therein (the Euro Notes Underwriters), pursuant to which the Company agreed to issue and sell to the Euro
Notes Underwriters 250,000,000 aggregate principal amount of its Floating Rate Notes due 2020 (the Floating Rate Notes) and 500,000,000 aggregate principal amount of its 1.625% Notes due 2026 (the Fixed Rate
Notes, and, together with the Floating Rate Notes, the Euro Notes).
On February 7, 2018, McKesson Corporation (the
Company) entered into an Underwriting Agreement (the USD Notes Underwriting Agreement and, together with the Euro Notes Underwriting Agreement, the Underwriting Agreements) with the several underwriters named
therein (the USD Notes Underwriters, and, together with the Euro Notes Underwriters, the Underwriters), pursuant to which the Company agreed to issue and sell to the USD Notes Underwriters $600,000,000 aggregate principal
amount of its 3.950% Notes due 2028 (the USD Notes). The offering of the USD Notes is expected to close on February 16, 2018, subject to customary closing conditions.
On February 12, 2018, the Euro Notes were issued pursuant to the Indenture, dated as of December 4, 2012 (the Indenture)
between the Company and Wells Fargo Bank, National Association, as trustee (the Trustee), as supplemented by an Officers Certificate, dated as of February 12, 2018, setting forth certain terms of the Euro Notes (the
Officers Certificate).
The Floating Rate Notes will bear interest at a floating rate equal to three-month EURIBOR plus
0.15% per year (provided, however, that the minimum interest rate shall be zero), and the Fixed Rate Notes will bear interest at the rate of 1.625% per year. Interest on the Floating Rate Notes is payable on February 12, May 12,
August 12 and November 12 of each year, beginning on May 12, 2018. Interest on the Fixed Rate Notes is payable on October 30 of each year, beginning on October 30, 2018.
Upon at least 15 days and not more than 45 days notice to holders of the Fixed Rate Notes, (1) the Company may redeem the
Fixed Rate Notes for cash in whole, at any time, or in part, from time to time, prior to maturity, at a redemption price that includes accrued and unpaid interest and a make-whole premium, and (2) the Company may redeem any series of the Euro
Notes for cash in whole, but not in part, at any time prior to maturity at a price equal to 100% of, plus accrued and unpaid interest, if certain tax events occur, in each case, as specified in the Indenture and the Officers Certificate. The
Indenture and the Officers Certificate include certain covenants, including limitations on the Companys ability to create certain liens on its assets or enter into sale and leaseback transactions with respect to its properties, or
consolidate, merge or sell all or substantially all of its assets, subject to a number of important exceptions as specified in the Indenture. The Euro Notes are unsecured and unsubordinated obligations of the Company and rank equally with all of the
Companys existing and future unsecured and unsubordinated indebtedness from time to time outstanding. The Indenture contains customary event of default provisions. In the event of the occurrence of both (1) a change of control of the
Company and (2) a downgrade of a series of Euro Notes below an investment grade rating by each of the Ratings Agencies (as defined in the Officers Certificate) within a specified period, unless the Company has previously exercised its
optional redemption right with respect to that series of Euro Notes in whole, the Company will be required to offer to repurchase the Euro Notes of that series from the holders at a price in cash equal to 101% of the then outstanding principal
amount of such series of Euro Notes, plus accrued and unpaid interest to, but not including, the date of repurchase.
The public offering
price of the Floating Rate Notes was 100.400% of the principal amount and the public offering price of the Fixed Rate Notes was 99.898% of the principal amount.
The Euro Notes were offered and sold pursuant to the Companys automatic shelf registration statement on Form
S-3
(Registration
No. 333-215763)
under the Securities Act of 1933, as amended. The Company has filed with the Securities and Exchange Commission (the SEC) a
prospectus supplement, dated February 7, 2018, together with the accompanying prospectus, dated January 27, 2017.
The Company
expects to receive approximately $917 million in aggregate net proceeds from the offering of the Euro Notes, after estimated expenses. It expects to use the net proceeds from the offering of the Euro Notes and the net proceeds from the offering
of the USD Notes to finance the purchase of up to $1.1 billion of the Companys outstanding notes pursuant to and upon the terms set forth in an offer to purchase and related letter of transmittal. The Company intends to use the remaining
net proceeds, if any, for working capital and general corporate purposes, which may include, among other things, the repayment of debt.
For a complete description of the terms and conditions of the Officers Certificate, the
Euro Notes and the Underwriting Agreements, please refer to the Officers Certificate, the form of Floating Rate Note, the form of Fixed Rate Note, the Euro Notes Underwriting Agreement and the USD Notes Underwriting Agreement, which are
incorporated herein by reference and attached to this Current Report on Form
8-K
as Exhibits 4.1, 4.2, 4.3, 99.1 and 99.2, respectively.
In reviewing the agreements included as exhibits to this Current Report on Form
8-K,
note that they are
included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about the Company or the other parties to the agreements. The agreements contain representations and
warranties by each of the parties to the applicable agreement. Those representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:
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should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
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may have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures would not necessarily be reflected in the agreement;
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may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
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were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.
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Accordingly, those representations and warranties may not describe the actual state of affairs as of the date they were made or at any other
time. Additional information about the Company may be found in our other public filings, which are available without charge through the SECs website at http://www.sec.gov.
From time to time in the ordinary course of their respective businesses, certain of the Underwriters, the Trustee and their respective
affiliates have engaged in and may in the future engage in commercial banking, derivatives and/or financial advisory, investment banking and other commercial transactions and services with the Company and its affiliates for which they have received
or will receive customary fees and commissions.