Bond Kroger Corp 4.5% ( US501044DL23 ) in USD

Kroger Corp

101.216 % ▼

United States

US501044DL23 ( in USD )

4.5% per year ( payment 2 times a year)

14/01/2029

Prospectus brochure of the bond Kroger CO US501044DL23 en USD 4.5%, maturity 14/01/2029

2 000 USD

600 000 000 USD

501044DL2

BBB ( Lower medium grade - Investment-grade )

Baa1 ( Lower medium grade - Investment-grade )

15/07/2026 ( In 158 days )

Kroger Co. is an American retail company operating a chain of grocery stores, supermarkets, and convenience stores across the United States.

The Bond issued by Kroger Corp ( United States ) , in USD, with the ISIN code US501044DL23, pays a coupon of 4.5% per year.
The coupons are paid 2 times per year and the Bond maturity is 14/01/2029

The Bond issued by Kroger Corp ( United States ) , in USD, with the ISIN code US501044DL23, was rated Baa1 ( Lower medium grade - Investment-grade ) by Moody's credit rating agency.

The Bond issued by Kroger Corp ( United States ) , in USD, with the ISIN code US501044DL23, was rated BBB ( Lower medium grade - Investment-grade ) by Standard & Poor's ( S&P ) credit rating agency.

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TABLE OF CONTENTS
TABLE OF CONTENTS
Table of Contents
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-215085
CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities
Maximum
Amount of
To Be Registered

Offering Price

Registration Fee(1)

4.500% Senior Notes due 2029

$600,000,000

$72,720

5.400% Senior Notes due 2049

$600,000,000

$72,720

$145,440

(1)
Pursuant to Rule 456(b), calculated in accordance with Rule 457(r) of the Securities Act of 1933.
Table of Contents
Prospectus Supplement to Prospectus dated December 14, 2016
$1,200,000,000
The Kroger Co.
$600,000,000 4.500% Senior Notes due 2029
$600,000,000 5.400% Senior Notes due 2049
Kroger is offering two series of notes due January 15, 2029 (the "2029 notes"), and due January 15, 2049 (the "2049 notes" and, together with
the 2029 notes, the "notes"). Kroger will pay interest on the notes on January 15 and July 15 of each year. The first interest payment on the notes
will be made on July 15, 2019. The notes will be issued only in denominations of $2,000 and integral multiples of $1,000 in excess thereof.
Kroger has the right to redeem all or any portion of the notes at any time at the applicable redemption prices described in this prospectus
supplement, plus accrued and unpaid interest on the notes being redeemed to the date of redemption. If a change of control triggering event as
described herein occurs, unless Kroger has exercised its option to redeem the notes, Kroger will be required to offer to repurchase the notes at the
price described in this prospectus supplement.
See "Risk Factors" beginning on page S-2 of this prospectus supplement to read about certain factors you should consider before buying
notes.
Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or
passed upon the accuracy or adequacy of this prospectus supplement or the accompanying prospectus. Any representation to the contrary
is a criminal offense.
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Initial Public
Underwriting
Proceeds, before

Offering Price

Discount

expenses, to Kroger

Per 4.500% note due 2029

99.403%
0.650%
98.753%
Total
$ 596,418,000
$ 3,900,000
$
592,518,000
Per 5.400% note due 2049

99.646%
0.875%
98.771%
Total
$ 597,876,000
$ 5,250,000
$
592,626,000
The initial public offering prices set forth above do not include accrued interest, if any. Interest on the notes will accrue from January 14, 2019
and must be paid by the purchaser if the notes are delivered after January 14, 2019.
The underwriters expect to deliver the notes in book-entry form only through the facilities of The Depository Trust Company for the accounts
of its participants, including Clearstream Banking, société anonyme, and Euroclear Bank S.A./N.V., as operator of the Euroclear System, against
payment in New York, New York on January 14, 2019.
Joint Book-Running Managers
Wells Fargo Securities
BofA Merrill Lynch

Citigroup

Goldman

US Bancorp
(2029 notes and 2049 notes)
(2049 notes)
(2029 notes)
Sachs & Co. LLC
(2029 notes)
(2049 notes)
BB&T Capital Markets

BNY Mellon Capital Markets, LLC

Fifth Third Securities
(2029 notes)
(2029 notes)
(2049 notes)
MUFG

RBC Capital Markets

Santander
(2029 notes)
(2049 notes)
(2049 notes)
Co-Managers
BofA Merrill Lynch

BB&T Capital Markets

BNY Mellon Capital Markets, LLC

Citigroup
(2029 notes)
(2049 notes)
(2049 notes)
(2049 notes)
Fifth Third Securities

Goldman Sachs & Co. LLC
Mizuho Securities

MUFG

PNC Capital Markets LLC
(2029 notes)
(2029 notes)
(2029 notes and 2049 notes)
(2049 notes)
(2029 notes and 2049 notes)
RBC Capital Markets

Santander

US Bancorp

Drexel Hamilton

The Williams Capital
(2029 notes)
(2029 notes)
(2049 notes)
(2029 notes)
Group, L.P.
(2049 notes)
Prospectus Supplement dated January 7, 2019.
Table of Contents
TABLE OF CONTENTS

Page

Prospectus Supplement

Risk Factors

S-2
The Company

S-3
Use of Proceeds

S-3
Conflicts of Interest

S-3
Description of the Notes

S-4
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United States Federal Tax Considerations
S-15
Underwriting
S-22
Conflicts of Interest
S-26
Validity of the Notes
S-27
Experts
S-27
Forward-Looking Statements
S-28
Incorporation by Reference
S-28
Prospectus

About This Prospectus

1
The Company

1
Risk Factors

1
Forward Looking Statements

1
Where You Can Find More Information

2
Consolidated Ratio of Earnings to Fixed Charges

3
Use of Proceeds

3
Plan of Distribution

3
Description of Debt Securities

4
Description of Capital Stock

7
Description of Depositary Shares

9
Description of Warrants

12
Experts

14
Legal Matters

14
S-1
Table of Contents
RISK FACTORS
You should carefully consider the risk factors included in our SEC filings as well as the following matters in deciding whether to purchase the
notes.
Our indebtedness could adversely affect us by reducing our flexibility to respond to changing business and economic conditions and
increasing our borrowing costs.
As of November 10, 2018, our total outstanding indebtedness, including capital leases and the current portion thereof, was approximately
$15.0 billion. As of November 10, 2018, we maintained a $2.75 billion revolving credit facility that terminates on August 29, 2022. Outstanding
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borrowings under the credit facility and commercial paper borrowings, and some outstanding letters of credit, reduce funds available under the
credit facility. As of November 10, 2018, we had $635 million of outstanding commercial paper and no borrowings under the credit facility. The
outstanding letters of credit that reduced the funds available under our credit facility totaled $5.3 million as of November 10, 2018.
This indebtedness could reduce our ability to obtain additional financing for working capital, acquisitions or other purposes and could make us
more vulnerable to economic downturns and competitive pressures. Our needs for cash in the future will depend on many factors that are difficult
to predict. These factors include results of operations, the timing and cost of acquisitions and efforts to expand existing operations.
We believe that we will have sufficient funds from all sources to meet our needs over the next several years. We cannot assure you, however,
that our business will generate cash flow at or above current levels. If we are unable to generate sufficient cash flow from operations in the future
to pay our debt and make necessary investments, we will be required to:
·
refinance all or a portion of our existing debt;
·
seek new borrowings;
·
forego strategic opportunities; or
·
delay, scale back or eliminate some aspects of our operations.
If necessary, any of these actions could have a material negative impact on our business, financial condition or results of operations.
The notes will effectively rank equal in right of payment with approximately $15.0 billion of our other indebtedness as of November 10, 2018.
In addition, 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.
Our sources of liquidity are dependent upon our lenders honoring their commitments.
Our $2.75 billion committed revolving credit facility, maturing on August 29, 2022, continues to remain available. Letters of credit totaling
$5.3 million as of November 10, 2018 reduce amounts available under the credit facility. Commercial paper borrowings also reduce amounts
available under the credit facility. As of November 10, 2018, we had $635 million of outstanding commercial paper. Our liquidity could be
affected if our committed lenders are unable or unwilling to honor their contractual obligations to us.
S-2
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Our operations may be negatively impacted by a variety of factors.
We obtain sales growth from new square footage, as well as from increased productivity from existing stores. Our ability to generate sales and
earnings could be adversely affected by the increasingly competitive environment in which we operate. In addition, a prolonged labor dispute,
delays in opening new stores, changes in the economic climate, unexpected changes in product cost, weather conditions and natural disasters,
government regulations, or other unanticipated events, could adversely affect our operations.
THE COMPANY
Kroger was founded in 1883 and was incorporated in 1902. We maintain our corporate offices in Cincinnati, Ohio, and as of November 10,
2018, we were one of the largest grocery retailers in the world based on annual sales. We also manufacture and process some of the food for sale in
our supermarkets.
As of November 10, 2018, directly or through subsidiaries we operated approximately 2,765 supermarkets, 2,270 pharmacies, 232 retail health
clinics, 263 fine jewelry stores, 1,532 supermarket fuel centers, and 37 food production plants in the United States. We also operated directly or
through subsidiaries an expanded Pickup offering, which is a personalized, order online, pick up at the store service.
USE OF PROCEEDS
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We estimate that the net proceeds from this offering will be approximately $1.18 billion after deducting the underwriting discounts and
estimated offering expenses payable by us. We expect to use the net proceeds of this offering to refinance long-term indebtedness and other
indebtedness, including debt that matures in January 2019, and for general corporate purposes.
CONFLICTS OF INTEREST
If any member of the Financial Industry Regulatory Authority ("FINRA") participating in this offering receives 5% or more of the net proceeds
of the offering by reason of the repayment of our debt, that member will be deemed to have a "conflict of interest" within the meaning of FINRA
Rule 5121, and this offering will be conducted in accordance with that rule. See "Underwriting--Conflicts of Interest."
S-3
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DESCRIPTION OF THE NOTES
The following description of the particular terms of the notes (referred to in the accompanying prospectus as the "debt securities")
supplements, and to the extent it is inconsistent with the description in the accompanying prospectus, it replaces the description of the general terms
and provisions of the debt securities in the accompanying prospectus. We will issue the notes under an indenture dated June 25, 1999, as it may be
amended and supplemented from time to time, between Kroger and Firstar Bank, National Association, now known as U.S. Bank National
Association, as trustee. We have summarized select portions of the indenture below. The summary is not complete and is qualified in its entirety by
reference to the indenture.
General
The 2029 notes initially will be limited to $600,000,000 aggregate principal amount, subject to our ability to issue additional notes that may
be of the same series as the 2029 notes as described under "Further Issues." The 2049 notes initially will be limited to $600,000,000 aggregate
principal amount, subject to our ability to issue additional notes that may be of the same series as the 2049 notes as described under "Further
Issues." The 2029 notes will mature on January 15, 2029. The 2049 notes will mature on January 15, 2049.
The notes will bear interest from January 14, 2019 at the rates shown on the front cover of this prospectus supplement. Interest on the notes is
payable semi-annually on January 15 and July 15 of each year, commencing on July 15, 2019, to the person in whose name such note is registered
at the close of business on January 1 or July 1, as the case may be, immediately preceding such interest payment dates. Interest on the notes will be
computed on the basis of a 360-day year of twelve 30-day months.
The notes rank equally in right of payment with all of our existing and future unsecured senior debt. The notes rank senior to any future
subordinated indebtedness.
The notes will effectively rank equal in right of payment with approximately $15.0 billion of other indebtedness of the company as of
November 10, 2018.
The notes are unsecured and not entitled to any sinking fund.
The notes will initially be issued only in registered, book-entry form, in denominations of $2,000 and integral multiples of $1,000 in excess
thereof as described under "Book-Entry Procedures." We will issue global securities in denominations equal to the total principal amount of
outstanding notes of the series represented by the global securities.
If any interest payment date or the maturity date of the notes does not fall on a business day, payment of interest or principal otherwise payable
on that day will be made on the next succeeding business day with the same effect as if made on the actual interest payment date or the maturity
date of the notes, as the case may be, and no interest will accrue for the period from and after such interest payment date or maturity date.
"Business day" means any day other than a Saturday or Sunday or a day on which banking institutions in New York City or Cincinnati, Ohio are
authorized or obligated by law or executive order to close.
Optional Redemption
The notes will be redeemable, in whole or in part, at our option at any time. If the 2029 notes are redeemed before October 15, 2028 (three
months prior to their maturity date), or if the
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S-4
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2049 notes are redeemed before July 15, 2048 (six months prior to their maturity date) (each such date, the "Par Call Date"), the redemption price
for the applicable notes will equal the greater of:
·
100% of the principal amount of the notes; and
·
the sum of the present values of the remaining scheduled payments of principal and interest on the notes being redeemed, excluding
accrued and unpaid interest on the date of redemption, from the redemption date to the Par Call Date of the applicable series. The
discount to the redemption date will be made on a semi-annual basis based on a 360-day year, with each month consisting of
30 days. The discount rate will equal the equivalent yield to maturity of U.S. Treasury securities having a comparable maturity to
the notes (assuming that the notes matured on the Par Call Date of the applicable series), plus 30 basis points with respect to the
2029 notes, and 40 basis points with respect to the 2049 notes. The determination of the rate will be made by an agent we appoint.
Initially, that agent will be Wells Fargo Securities, LLC.
The redemption price for the notes will include accrued and unpaid interest on the notes being redeemed to the date of redemption.
In addition, on or after the Par Call Date of the applicable series the notes of such series will be redeemable, in whole or in part, at our option
at any time, at a redemption price equal to 100% of the aggregate principal amount of the notes being redeemed plus accrued and unpaid interest on
the notes being redeemed to the date of redemption.
Notice of any redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each holder of the notes to
be redeemed. Unless we default in payment of the redemption price, interest will cease to accrue on and after the redemption date on the notes or
portions of the notes called for redemption.
Covenants
The indenture provides that the following covenants will apply to us:
Limitations on Liens. We covenant that, so long as any notes remain outstanding, neither we nor any of our restricted subsidiaries will issue,
assume or guarantee any secured debt or other agreement comparable to secured debt upon any material real property or operating asset unless
these notes and other debt ranking equally to these notes also is so secured on an equal basis. This restriction will not apply to the following:
(1)
liens on any property or assets of any corporation existing at the same time such corporation becomes a restricted subsidiary
provided that the lien does not extend to any of our other property or that of any other restricted subsidiaries;
(2)
liens existing on assets acquired by us, to secure the purchase price of assets, or to obtain a release of liens from any of our other
property, incurred no later than 18 months after the acquisition, assumption, guarantee, or, in the case of real estate, completion of
construction and commencement of operations;
(3)
liens securing indebtedness owing by any restricted subsidiary to us or another restricted subsidiary;
(4)
liens on any assets existing upon acquisition of a corporation through merger or by acquisition of all or substantially all of the assets
by us or a restricted subsidiary;
S-5
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(5)
liens in favor of the U.S., a foreign country, or any political subdivision to secure payments of debt incurred to finance the purchase
of assets;
(6)
liens existing on our or any of our restricted subsidiaries' properties or assets existing on the date of the supplemental indenture;
provided that the liens secure only those obligations which they secure on the date of the supplemental indenture or any extension,
renewal or replacement thereof;
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(7)
any extension, renewal or replacement (or successive extensions, renewals or replacements) in whole or in part, of any lien referred
to in clauses (1) through (6);
(8)
some statutory liens or other similar liens arising in the ordinary course of our or any of our restricted subsidiaries' business, or
some liens arising out of governmental contracts;
(9)
some pledges, deposits or liens made or arising under worker's compensation or similar legislation or in some other circumstances;
(10)
some liens in connection with legal proceedings, including some liens arising out of judgments or awards;
(11)
liens for some taxes or assessments, landlord's liens, mechanic's liens and liens and charges incidental to the conduct of the
business, or the ownership of our or any of our restricted subsidiaries' property or assets that were not incurred in connection with
the borrowing of money and that do not, in our opinion, materially impair the use of the property or assets in the operation of our
business or that of a restricted subsidiary or the value of the property or assets for its purposes; or
(12)
any other liens not included above, which together with amounts included in clause (1) of the next section do not exceed 10% of our
consolidated net tangible assets.
Limitation on Sale and Lease-Back Transactions. We and our restricted subsidiaries will not sell and leaseback for a term greater than three
years under a capital lease any material real property or operating assets unless:
(1)
we could incur secured debt on that property equal to the present value of rentals under the lease without having to equally secure
the note; or
(2)
the sale proceeds equal or exceed the fair market value of the property and the net proceeds are used within 180 days to acquire
material real property or operating assets or to purchase or redeem notes offered hereby or long term debt, including capital leases,
that are senior to or rank on parity with these notes.
This restriction does not apply to sale and lease-back transactions of material property or operating assets acquired or constructed after
18 months prior to the date of the indenture as long as a commitment for the sale and lease-back is made within 18 months of acquisition, in the
case of operating assets, and of completion of construction and commencement of operations, in the case of material real property.
For purposes of these covenants, a "subsidiary" is an entity that we directly or indirectly control, including partnerships in which we or our
subsidiaries own a greater than 50% interest. Restricted subsidiaries are all of our subsidiaries other than those our board of directors has
determined are not material.
The covenants applicable to the notes would not necessarily afford holders protection in the event of a highly leveraged or other transaction
involving us or in the event of a material adverse
S-6
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change in our financial condition or results of operation, and the notes do not contain any other provisions that are designed to afford protection in
the event of a highly leveraged transaction involving us.
Merger and Consolidation
The indenture provides that we will not merge or consolidate with any corporation, partnership or other entity and will not sell, lease or
convey all or substantially all of our assets to any entity, unless:
·
we are the surviving entity, or the surviving or successor entity is a corporation or partnership organized under the laws of the
United States or a State thereof or the District of Columbia and expressly assumes all our obligations under the indenture and the
notes; and
·
immediately after the merger, consolidation, sale, lease or conveyance, we or the successor entity are not in default in the
performance of the covenants and conditions of the indenture.
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Change of Control
If a Change of Control Triggering Event occurs, unless we have exercised our right to redeem the notes as described above, holders of notes
will have the right to require us to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of their notes
pursuant to the offer described below (the "Change of Control Offer") on the terms set forth in the notes. In the 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 the date of purchase (the "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 the public announcement of the Change of Control, we will be
required to mail a notice to holders of notes describing the transaction or transactions that constitute or may constitute the Change of Control
Triggering Event and offering to repurchase the notes on the date specified in the notice, which date will be no earlier than 30 days and no later
than 60 days from the date such notice is mailed (the "Change of Control Payment Date"), pursuant to the procedures required by the notes and
described in such notice. The notice shall, if mailed prior to the date of consummation of the Change of Control, state that the offer to purchase is
conditioned on the Change of Control Triggering Event occurring on or prior to the payment date specified in the notice. We must comply with the
requirements of Rule 14e-1 under the Securities Exchange Act of 1934, as amended (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 provisions
of the notes, we will be required to comply with the applicable securities laws and regulations and will not be deemed to have breached our
obligations under the Change of Control provisions of the notes by virtue of such conflicts.
On the Change of Control Payment Date, we will be required, to the extent lawful, to:
·
accept for payment all notes or portions of notes properly tendered pursuant to the Change of Control Offer;
·
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
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·
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 purchased.
The definition of Change of Control includes a phrase relating to the direct or indirect sale, lease, transfer, conveyance or other disposition of
"all or substantially all" of the properties or assets of Kroger and its subsidiaries taken as a whole. Although there is a limited body of case law
interpreting the phrase "substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a
holder of notes to require Kroger to repurchase its notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the
assets of Kroger and its subsidiaries taken as a whole to another Person or group may be uncertain.
For purposes of the foregoing discussion of a repurchase at the option of holders, the following definitions are applicable:
"Below Investment Grade Rating Event" means the notes are rated below an Investment Grade Rating by each of the Rating Agencies (as
defined below) on any date from the date of the public notice of an arrangement that could result in a Change of Control until the end of the 60-day
period following public notice of the occurrence of the Change of Control (which 60-day period shall be extended so long as the rating of the notes
is under publicly announced consideration for possible downgrade below investment grade by any of the Rating Agencies); provided that a Below
Investment Grade Rating Event otherwise arising by virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a
particular Change of Control (and thus shall not be deemed a Below Investment Grade Rating Event for purposes of the definition of Change of
Control Triggering Event) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or
publicly confirm or inform the trustee in writing at our request that the reduction 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 shall have
occurred at the time of the Below Investment Grade Rating Event).
"Change of Control" means the occurrence of any of the following: (1) the direct or indirect sale, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of
Kroger and its subsidiaries taken as a whole to any "person" (as that term is used in Section 13(d)(3) of the Exchange Act) other than Kroger or one
of its subsidiaries; (2) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that
any "person" (as that term is used in Section 13(d)(3) of the Exchange Act) becomes the beneficial owner, directly or indirectly, of more than 50%
of the then outstanding number of shares of Kroger's voting stock; or (3) the first day on which a majority of the members of Kroger's Board of
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Directors are not Continuing Directors. Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control if (1) we
become a wholly owned subsidiary of a holding company that has agreed to be bound by the terms of the notes and (2) the 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.
"Change of Control Triggering Event" means the occurrence of both a Change of Control and a Below Investment Grade Rating Event.
"Continuing Directors" means, as of any date of determination, members of the Board of Directors of Kroger who (1) were members of such
Board of Directors on the date of the issuance
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of the notes; or (2) were nominated for election or elected to such Board of Directors with the approval of a majority of the continuing directors
under clause (1) or (2) of this definition who were members of such Board of Directors at the time of such nomination or election (either by a
specific vote or by approval of Kroger's proxy statement in which such member was named as a nominee for election as a director, without
objection to such nomination).
"Investment Grade Rating" means a rating equal to or higher than Baa3 (or the equivalent) by Moody's and BBB (or the equivalent) by S&P,
and the equivalent investment grade credit rating from any replacement rating agency or rating agencies selected by us.
"Moody's" means Moody's Investors Service, Inc.
"Person" means any individual, partnership, corporation, limited liability company, joint stock company, business trust, trust, unincorporated
association, joint venture or other entity, or a government or political subdivision or agency thereof.
"Rating Agencies" means (1) each of Moody's and S&P; and (2) if Moody's or S&P 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" as defined in Section 3(a)(62) of
the Exchange Act, selected by us (as certified by a resolution of our Board of Directors) as a replacement agency for Moody's or S&P, or any of
them, as the case may be.
"S&P" means Standard & Poor's Ratings Services, a division of McGraw-Hill Financial, Inc.
Book-Entry Procedures
DTC. The Depository Trust Company, New York, New York ("DTC"), will act as securities depository for the notes. The notes will be
issued as fully-registered securities registered in the name of Cede & Co., which is DTC's nominee. Fully-registered global notes will be issued
with respect to each of the notes. See "Description of Debt Securities -- Global Securities" in the accompanying prospectus for a description of
DTC's procedures with respect to global notes.
Ownership of beneficial interests in a global note will be limited to DTC participants and to persons that may hold interests through
institutions that have accounts with DTC, including Euroclear and Clearstream ("participants"). Beneficial interests in a global note will be shown
on, and transfers of those ownership interests will be effected only through, records maintained by DTC and its participants for the global note. The
conveyance of notices and other communications by DTC to its participants and by its participants to owners of beneficial interests in the notes will
be governed by arrangements among them, subject to any statutory or regulatory requirements in effect.
Principal and interest payments on the global notes represented by a global security will be made to DTC or its nominee, as the case may be,
as the sole registered owner and the sole holder of the global notes represented by the global security for all purposes under the indenture.
Accordingly, we, the trustee and the paying agent under the indenture will have no responsibility or liability for:
·
any aspect of DTC's records relating to, or payments made on account of, beneficial ownership interests in a global note represented
by a global security;
·
any other aspect of the relationship between DTC and its participants or the relationship between the participants and the owners of
beneficial interests in a global note held through the participants; or
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·
the maintenance, supervision or review of any of DTC's records relating to the beneficial ownership interests.
DTC has advised us that upon receipt of any payment of principal of or interest on a global note, DTC will immediately credit, on its book-
entry registration and transfer system, the accounts of participants with payments in amounts proportionate to their respective beneficial interests in
the principal amount of the global note as shown on DTC's records. The applicable underwriter or underwriters will initially designate the accounts
to be credited. Payments by participants to owners of beneficial interests in a global note will be governed by standing instructions and customary
practices, as is the case with securities held for customer accounts in bearer form or registered in "street name," and will be the sole responsibility
of those participants.
A global note can only be transferred:
·
as a whole by DTC to one of its nominees;
·
as a whole by a nominee of DTC to DTC or another nominee of DTC; or
·
as a whole by DTC or a nominee of DTC to a successor of DTC or a nominee of the successor.
Global notes represented by a global security can be exchanged for certificated notes in registered form only if:
·
DTC notifies us that it is unwilling or unable to continue as depositary for the global note and we do not appoint a successor
depositary within 90 days after receiving the notice;
·
at any time DTC ceases to be a clearing agency registered under the Exchange Act and we do not appoint a successor depositary
within 90 days after becoming aware that DTC has ceased to be so registered as a clearing agency;
·
we in our sole discretion determine that a global note will be exchangeable for certificated notes in registered form and notify the
trustee of our decision; or
·
an event of default with respect to the notes represented by a global note has occurred and is continuing.
A global note that can be exchanged under the previous paragraph will be exchanged for certificated notes that are issued in authorized
denominations in registered form for the same aggregate amount. Those certificated notes will be registered in the names of the owners of the
beneficial interests in the global note as directed by DTC.
Except as provided above, owners of beneficial interests in a note will not be entitled to receive physical delivery of notes in certificated form
and will not be considered the holders of the notes for any purpose under the indenture and no global notes represented by a global security will be
exchangeable. Each person owning a beneficial interest in a global note must rely on the procedures of DTC (and if the 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 or the global
note. The laws of some jurisdictions require that purchasers of securities take physical delivery of the securities in certificated form. Those laws
may impair the ability to transfer beneficial interests in a global note.
DTC advises that it 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
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provisions of Section 17A of the Exchange Act. DTC holds securities that its participants deposit with DTC. DTC also facilitates the settlement
among participants of securities transactions, including transfers and pledges, in deposited securities through electronic computerized book-entry
changes in participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct participants include
securities brokers and dealers, including the underwriters, banks, trust companies, clearing corporations and certain other organizations. DTC is
owned by a number of its direct participants and by the NYSE Euronext and the Financial Industry Regulatory Authority. Access to DTC's system
is also available to others, including securities brokers and dealers, banks and trust companies that clear transactions through or maintain a direct or
indirect custodial relationship with a direct participant either directly, or indirectly. The rules applicable to DTC and its participants are on file with
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