Item 2.03.
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Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance
Sheet Arrangement of a Registrant.
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On May 22, 2017, Martin Marietta Materials, Inc. (Martin Marietta) issued $300 million aggregate principal amount of
Floating Rate Senior Notes due 2020 (the Floating Rate Notes) and $300 million aggregate principal amount of 3.450% Senior Notes due 2027 (the Fixed Rate Notes and, together with the Floating Rate Notes, the Senior
Notes) pursuant to an indenture, dated as of May 22, 2017 (the Base Indenture), between Martin Marietta and Regions Bank, as trustee (the Trustee), as amended and supplemented by the First Supplemental Indenture,
dated as of May 22, 2017 (the First Supplemental Indenture and, together with the Base Indenture, the Indenture), governing the Senior Notes.
The Floating Rate Notes will mature on May 22, 2020 and will bear interest at a per annum floating rate, reset quarterly, equal to
three-month LIBOR for U.S. dollars plus 0.65%. Interest will be paid quarterly in arrears on February 22, May 22, August 22 and November 22, commencing August 22, 2017. The Fixed Rate Notes will mature on June 1, 2027
and will have an interest rate of 3.450%. Interest will be paid semiannually on the 1st day of June and December, commencing December 1, 2017.
The Senior Notes are Martin Mariettas senior unsecured obligations and rank equally in right of payment with all of its existing and
future senior indebtedness and will rank senior in right of payment to all of its future subordinated indebtedness. The Senior Notes are effectively subordinated to all of its existing and future secured indebtedness to the extent of the value of
the assets securing such indebtedness. The Senior Notes are not guaranteed by any of Martin Mariettas subsidiaries and are structurally subordinated to all of the existing and future indebtedness and other liabilities (including trade accounts
payable) and preferred equity of Martin Mariettas subsidiaries.
The net proceeds of the offering are expected to be used to
(i) refinance in full at maturity Martin Mariettas existing floating rate notes scheduled to mature on June 30, 2017, (ii) repay approximately $200 million of the debt outstanding under Martin Mariettas revolving credit
facility and (iii) repay approximately $94 million of the debt outstanding under Martin Mariettas trade receivables facility.
Optional Redemption
.
Martin Marietta may not redeem the Floating Rate Notes prior to their stated maturity date of May 22,
2020. Prior to March 1, 2027 (the Par Call Date), Martin Marietta may redeem at any time in whole or from time to time in part the Fixed Rate Notes at a price equal to the greater of: (i) 100% of the principal amount of the Fixed
Rate Notes to be redeemed and (ii) the sum of the present values of the principal amount of the Fixed Rate Notes to be redeemed and the remaining scheduled payments of interest thereon after the date of optional redemption through the Par Call
Date (assuming, for this purpose, that the Fixed Rate Notes are scheduled to mature on the Par Call Date), excluding interest, if any, accrued thereon to such optional redemption date, discounted to such optional redemption date on a semiannual
basis (assuming a
360-day
year consisting of twelve
30-day
months) at the Treasury Rate (as defined in the Indenture) plus 20 basis points (or 0.20%) plus unpaid
interest, if any, accrued thereon to, but excluding, the optional redemption date. On or after March 1, 2027, Martin Marietta may redeem the Fixed Rate Notes at any time in whole or from time to time in part at a redemption price equal to 100%
of the principal amount of the Fixed Rate Notes to be redeemed, plus unpaid interest, if any, accrued thereon to, but excluding, the optional redemption date.
2
Change of Control Repurchase Event
. If a Change of Control Repurchase Event (as defined in
the Indenture) occurs, unless, in the case of the Fixed Rate Notes, Martin Marietta has exercised its right to redeem the Fixed Rate Notes in full, Martin Marietta will be required to repurchase all of the outstanding Notes at a repurchase price
equal to 101% of their principal amount, plus unpaid interest, if any, accrued thereon to, but excluding, the date of repurchase.
Other Covenants
.
The Indenture contains covenants that restrict Martin Mariettas ability, with certain exceptions, to
(i) incur debt secured by liens, (ii) engage in sale and leaseback transactions and (iii) merge or consolidate with or into, or transfer all or substantially all of the assets of Martin Marietta and its subsidiaries, taken as a whole,
to, another entity. These covenants are subject to a number of important exceptions and qualifications, as described in the Indenture.
Events of Default
. The Indenture provides for customary events of default (subject in certain cases to customary grace and cure
periods), which include
non-payment,
breach of covenants in the Indenture and certain events of bankruptcy and insolvency. Generally, if an event of default occurs, the Trustee or holders of at least 25% in
aggregate principal amount of the outstanding affected series of the Senior Notes may declare the principal of such affected series immediately due and payable.
The Senior Notes have been registered under the Securities Act of 1933, as amended (the Act), under the Registration Statement on
Form
S-3ASR
(Registration
No. 333-217991),
which initially became effective on May 12, 2017. On May 17, 2017, Martin Marietta filed with the Securities
and Exchange Commission (the Commission), pursuant to Rule 424(b)(5) under the Act, its preliminary Prospectus Supplement, dated May 17, 2017, pertaining to the public offering and sale of the Senior Notes. On May 19, 2017,
Martin Marietta filed with the Commission, pursuant to Rule 424(b)(5) of the Act, its final Prospectus Supplement, dated May 17, 2017, pertaining to the public offering and sale of the Senior Notes.
The foregoing description of the Indenture (including the form of Floating Rate Notes and form of Fixed Rate Notes) does not purport to be
complete and is qualified in its entirety by reference to the full text of the Base Indenture and First Supplemental Indenture (including the form of Floating Rate Notes and form of Fixed Rate Notes), which are attached hereto as Exhibits 4.3 and
4.4, respectively, and incorporated by reference herein.