| Item 1.01 |
Entry into a Material Definitive Agreement.
|
Notes Offering
On May 23, 2022, PayPal Holdings, Inc. (the “Company”) issued and
sold $3.0 billion aggregate principal amount of senior notes,
consisting of $500 million aggregate principal amount of
3.900% notes due 2027 (the “2027 Notes”), $1 billion aggregate
principal amount of 4.400% notes due 2032 (the “2032 Notes”),
$1 billion aggregate principal amount of 5.050% notes due 2052
(the “2052 Notes”) and $500 million aggregate principal amount
of 5.250% notes due 2062 (the “2062 Notes” and, together with the
2027 Notes, the 2032 Notes and the 2052 Notes, the “Notes”).
The Notes were issued pursuant to an indenture, dated as of
September 26, 2019 (the “Base Indenture”), between the Company
and Computershare Trust Company, N.A. as successor to Wells Fargo
Bank, National Association, as trustee, together with the officer’s
certificate, dated May 23, 2022 (the “Officer’s Certificate”
and, together with the Base Indenture, the “Indenture”), issued
pursuant to the Indenture establishing the terms of each series of
Notes.
The Notes were issued pursuant to the Company’s Registration
Statement on Form S-3 filed
with the Securities and Exchange Commission on September 16,
2019 (Registration Statement No. 333-233776) (the “Registration
Statement”).
The 2027 Notes will mature on June 1, 2027, the 2032 Notes
will mature on June 1, 2032, the 2052 Notes will mature on
June 1, 2052 and the 2062 Notes will mature on June 1,
2062, unless earlier redeemed or repurchased. Interest on the Notes
is payable on June 1 and December 1 of each year,
beginning on December 1, 2022.
The Company may redeem 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, if any, and a make-whole
premium. However, no make-whole premium will be paid for
redemptions of the 2027 Notes on or after May 1, 2027, for
redemptions of the 2032 Notes on or after March 1, 2032, for
redemptions of the 2052 Notes on or after December 1, 2051 or
for redemptions of the 2062 Notes on or after December 1,
2061. The Indenture includes covenants (1) limiting the
Company’s and its restricted subsidiaries ability to create liens
on certain properties and capital stock and indebtedness of these
restricted subsidiaries and enter into sale and leaseback
transactions with respect to certain properties and
(2) limiting the Company’s ability to consolidate, merge or
sell all or substantially all of its assets, in each case subject
to a number of important exceptions as specified in the Indenture.
The Indenture also 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 Fitch Inc.,
Standard & Poor’s Ratings Services and Moody’s Investors
Service, Inc. within a specified period, the Company will be
required to offer to repurchase any outstanding Notes of that
series at a price in cash equal to 101% of the then outstanding
principal amount of such series of Notes, plus accrued and unpaid
interest. The Notes are the Company’s unsecured senior obligations
and rank equally in right of payment with all of the Company’s
existing and future unsecured and unsubordinated indebtedness. The
Notes will be structurally subordinated to the liabilities of our
subsidiaries and will be effectively subordinated to any secured
indebtedness to the extent of the value of the assets securing such
indebtedness.
The above description of the Indenture and the Notes does not
purport to be complete and is qualified in its entirety by
reference to the Indenture and the Officer’s Certificate (including
the forms of Notes included therein), attached as Exhibits 4.1,
4.2, 4.3, 4.4, 4.5 and 4.6, and incorporated herein by
reference.
Tender Offer
On May 20, 2022, the Company issued a press release announcing the
expiration and results of the previously announced tender offer to
purchase for cash any and all of the Company’s 2.200% Senior Notes
due September 2022 and 1.350% Senior Notes due June 2023. The
tender offer expired at 5:00 pm, New York City time, on
May 20, 2022. A copy of the press release is attached as
Exhibit 99.1 and incorporated by reference herein.
The information in this Item 8.01 is neither an offer to purchase
nor a solicitation of an offer to sell securities. No offer,
solicitation, purchase or sale will be made in any jurisdiction in
which such offer, solicitation, or sale would be unlawful.
