On November 28, 2018, McKesson Corporation (the Company) entered into an Underwriting Agreement (the Underwriting
Agreement) with the several underwriters named therein (the Underwriters), pursuant to which the Company agreed to issue and sell to the Underwriters $700,000,000 aggregate principal amount of its 3.650% Notes due 2020 (the
2020 Notes) and $400,000,000 aggregate principal amount of its 4.750% Notes due 2029 (the 2029 Notes and, together with the 2020 Notes, the Notes). On November 30, 2018, the 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
November 30, 2018, setting forth certain terms of the Notes (the Officers Certificate).
The 2020 Notes will bear
interest at the rate of 3.650% per year. The 2029 Notes will bear interest at the rate of 4.750% per year. Interest on the Notes is payable on May 30 and November 30 of each year, beginning on May 30, 2019.
Upon at least 15 days and not more than 45 days notice to holders of the Notes, the Company may redeem either series of the Notes
for cash in whole, at any time, or in part, from time to time, prior to maturity, at redemption prices that include accrued and unpaid interest and a make-whole premium, 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 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 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 the applicable series of Notes in whole, the Company will be required to offer to repurchase such Notes from the holders at a price in cash equal to 101% of the then outstanding principal amount of such Notes, plus accrued and
unpaid interest to, but not including, the date of repurchase.
The public offering price of the 2020 Notes was 99.954% of the principal
amount and the public offering price of the 2029 Notes was 99.704% of the principal amount. The Company expects to receive approximately $1.092 billion in aggregate net proceeds from the offering of the Notes, after estimated expenses. The
Company expects to use the net proceeds from this offering for general corporate purposes, which may include, among other things, the repayment of debt.
The 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 November 28, 2018, together with the accompanying prospectus, dated January 27, 2017.
For a complete description of the terms and conditions of the Officers Certificate, the Notes and the Underwriting Agreement, please
refer to the Officers Certificate and the form of 2020 Note, the form of 2029 Note and the 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 and 99.1, 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 may 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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