PHILIP MORRIS INTERNATIONAL INC. (the “Company”) Debt Securities TERMS AGREEMENT
Exhibit 1.2
XXXXXX XXXXXX INTERNATIONAL INC.
(the “Company”)
Debt Securities
October 31, 2017
XXXXXX XXXXXX INTERNATIONAL INC.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
| Attention: | Xxxxx de Rooij |
| Vice President Treasury and Corporate Finance |
Dear Ladies and Gentlemen:
On behalf of the several Underwriters named in Schedule A hereto and for their respective accounts, we offer to purchase, on and subject to the terms and conditions of the Underwriting Agreement relating to Debt Securities and Warrants to Purchase Debt Securities dated as of April 25, 2008 in connection with Xxxxxx Xxxxxx International Inc.’s registration statement on Form S-3 (No. 333-216046) and which is incorporated herein by reference (the “Underwriting Agreement”), the following securities on the following terms:
Debt Securities
Title:
1.875% Notes due 2019 (the “2019 Notes”), 2.500% Notes due 2022 (the “2022 Notes”) and the 3.125% Notes due 2028 (the “2028 Notes” and, together with the 2019 Notes and the 2022 Notes, the “Notes”).
Principal Amount:
In the case of the 2019 Notes, $750,000,000.
In the case of the 2022 Notes, $750,000,000.
In the case of the 2028 Notes, $500,000,000.
Interest Rate:
In the case of the 2019 Notes, 1.875% per annum, from November 2, 2017, payable semi-annually in arrears on May 1 and November 1, commencing May 1, 2018, to holders of record on the preceding April 16 or October 17, as the case may be.
In the case of the 2022 Notes, 2.500% per annum, from November 2, 2017, payable semi-annually in arrears on May 2 and November 2, commencing May 2, 2018, to holders of record on the preceding April 17 or October 18, as the case may be.
In the case of the 2028 Notes, 3.125% per annum, from November 2, 2017, payable semi-annually in arrears on March 2 and September 2, commencing March 2, 2018, to holders of record on the preceding February 15 or August 18, as the case may be.
Maturity:
In the case of the 2019 Notes, November 1, 2019.
In the case of the 2022 Notes, November 2, 2022.
In the case of the 2028 Notes, March 2, 2028.
Currency of Denomination:
United States Dollars ($).
Currency of Payment:
United States Dollars ($).
Form and Denomination:
Book-entry form only represented by one or more global securities deposited with The Depository Trust Company, or DTC, Clearstream Banking, société anonyme, or Clearstream, or Euroclear Bank S.A./N.V., or Euroclear, or their respective designated custodian, as the case may be, in denominations of $2,000 and integral multiples of $1,000 in excess thereof.
Conversion Provisions:
None.
Optional Redemption:
At any time, the Company may redeem the 2019 Notes, in whole or in part, at the Company’s election at a make-whole price, as described under the caption “Description of Notes—Optional Redemption” in the prospectus supplement.
Prior to the date that is one month prior to maturity, the Company may redeem the 2022 Notes, in whole or in part, at the Company’s election at a make-whole price, as described under the caption “Description of Notes—Optional Redemption” in the prospectus supplement.
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On or after the date that is one month prior to maturity, the Company may redeem the 2022 Notes, in whole or in part, at the Company’s election, at par, as described under the caption “Description of Notes—Optional Redemption” in the prospectus supplement.
Prior to the date that is three months prior to maturity, the Company may redeem the 2028 Notes, in whole or in part, at the Company’s election at a make-whole price, as described under the caption “Description of Notes—Optional Redemption” in the prospectus supplement.
On or after the date that is three months prior to maturity, the Company may redeem the 2028 Notes, in whole or in part, at the Company’s election, at par, as described under the caption “Description of Notes—Optional Redemption” in the prospectus supplement.
Optional Tax Redemption:
The Company may redeem all, but not part, of the Notes of each series upon the occurrence of specified tax events described under the caption “Description of Notes—Redemption for Tax Reasons” in the prospectus supplement.
Option to Elect Repayment:
None.
Sinking Fund:
None.
Listing:
Application shall be made by the Company to list the Notes on the New York Stock Exchange.
Delayed Delivery Contracts:
None.
Payment of Additional Amounts:
In addition, the Company shall pay additional amounts to holders as and to the extent set forth under the caption “Description of Notes—Payment of Additional Amounts” in the prospectus supplement.
Purchase Price:
In the case of the 2019 Notes, 99.653% of the principal amount of the 2019 Notes.
In the case of the 2022 Notes, 99.271% of the principal amount of the 2022 Notes.
In the case of the 2028 Notes, 98.845% of the principal amount of the 2028 Notes.
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Expected Reoffering Price:
In the case of the 2019 Notes, 99.803% of the principal amount of the 2019 Notes.
In the case of the 2022 Notes, 99.571% of the principal amount of the 2022 Notes.
In the case of the 2028 Notes, 99.295% of the principal amount of the 2028 Notes.
Names and Addresses of the Representatives of the Several Underwriters:
Barclays Capital Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx
Attention: Syndicate Registration
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx
Attention: General Counsel
Credit Suisse Securities (USA) LLC
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx
Attention: IBD RCG Documentation – RDO-001
Deutsche Bank Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx
Attention: Debt Capital Markets Syndicate, with a copy to General Counsel
ING Financial Markets LLC
1133 Avenue of the Americas, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx
Attention: Global Capital Markets, New York, with a copy to the Deputy General Counsel
Santander Investment Securities Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx
Attention: Debt Capital Markets
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The respective principal amounts of the Debt Securities to be severally purchased by each of the Underwriters are set forth opposite their names in Schedule A hereto.
Except as set forth below, the provisions of the Underwriting Agreement are incorporated herein by reference and the following provisions are hereby added thereto and made a part thereof:
1. For purposes of the Underwriting Agreement, the “Applicable Time” is 5:00 p.m. (New York City time) on the date of this Terms Agreement.
2. For purposes of Section 6 of the Underwriting Agreement, the only information furnished to the Company by the Underwriters for use in the prospectus supplement consists of the following information: the concession and reallowance figures appearing in the third paragraph under the caption “Underwriting” in the prospectus supplement and the information contained in the fifth, sixth, seventh, ninth, eleventh and twelfth paragraphs under the caption “Underwriting” in the prospectus supplement. In addition, subsection (a) of Section 6 of the Underwriting Agreement is hereby amended by replacing “Pricing Prospectus” with “Pricing Prospectus or the Prospectus.”
3. The following selling restrictions apply to the offer and sale of the Notes:
(a) Each Underwriter hereby severally represents and agrees that it has not offered, sold or delivered and it will not offer, sell or deliver, directly or indirectly, any of the Notes or distribute the Prospectus, or any other offering material relating to the Notes, in or from any jurisdiction except under circumstances that will result in compliance with the applicable laws and regulations thereof and that will not impose any obligations on the Company except as agreed to with the Company in advance of such offer, sale or delivery.
(b) Each Underwriter hereby severally represents and agrees that in relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), each underwriter hereby severally represents and agrees that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the Relevant Implementation Date) it has not made and will not make an offer of Notes which are the subject of the offering contemplated by the Prospectus to the public in that Relevant Member State other than:
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(1) to any legal entity which is a qualified investor as defined in the Prospectus Directive;
(2) to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive), subject to obtaining the prior consent of the relevant Dealer or Dealers nominated by the Company for any such offer; or
(3) in any other circumstances falling within Article 3(2) of the Prospectus Directive,
provided that no such offer of Notes shall require the Company or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.
For the purposes of this provision, the expression an “offer of Notes to the public” in relation to any Notes in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to purchase or subscribe for Notes, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State, the expression “Prospectus Directive” means Directive 2003/71/EC, as amended, including by Directive 2010/73/EU, and includes any relevant implementing measure in the Relevant Member State.
(c) Each Underwriter hereby severally represents and agrees that (1) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Xxx 0000 (the “FSMA”)) received by it in connection with the issue or sale of the Notes in circumstances in which Section 21(1) of the FSMA does not apply to the Company; and (2) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Notes in, from or otherwise involving the United Kingdom.
(d) Each Underwriter hereby severally represents and agrees that (1) it has not offered or sold and will not offer or sell in Hong Kong, by means of any document, any Notes other than (A) to persons whose ordinary business is to buy or sell shares or debentures (whether as principal or agent); or (B) to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance; or (C) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance; and (2) it has not issued or had in its possession for the purposes of issue, and will not issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the Notes, which is directed at, or the
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contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to Notes which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the Securities and Futures Ordinance and any rules made under that Ordinance.
(e) Each Underwriter hereby severally represents and agrees that it will not offer or sell the Notes or make the Notes the subject of an invitation for subscription or purchase nor may it circulate or distribute the Prospectus or any other document or material in connection with the offer or sale or invitation for subscription or purchase of any Notes, whether directly or indirectly, to any person in Singapore other than (1) to an institutional investor pursuant to Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “Securities and Futures Act”), (2) to a relevant person, or any person pursuant to Section 275(1A) of the Securities and Futures Act, and in accordance with the conditions specified in Section 275 of the Securities and Futures Act, or (3) pursuant to, and in accordance with the conditions of, any other applicable provision of the Securities and Futures Act.
(f) Each Underwriter hereby severally represents and agrees that it will not offer or sell any Notes, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to, or for the benefit of, a resident of Japan except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948, as amended) and any other applicable laws, regulations and ministerial guidelines of Japan.
(g) Each Underwriter hereby severally represents and agrees that it has offered or sold and will offer or sell the Notes in Canada only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations; any resale of the Notes will be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws; and pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with the offering of the Notes.
The Closing will take place at 9:00 a.m., New York City time, on November 2, 2017 (the “Closing Date”), at the offices of Hunton & Xxxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
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The Notes will be made available for checking at the offices of Hunton & Xxxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (unless another location shall be agreed to by the Company and the Underwriters) at least 24 hours prior to the Closing Date.
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Please signify your acceptance by signing the enclosed response to us in the space provided and returning it to us.
| Very truly yours, | ||
| BARCLAYS CAPITAL INC. | ||
| By: | /s/ Xxxxxx Xxxxx | |
| Name: | Xxxxxx Xxxxx | |
| Title: | Managing Director | |
[Signature Page to Terms Agreement]
| CITIGROUP GLOBAL MARKETS INC. | ||
| By: | /s/ Xxxx X. Xxxxxxx | |
| Name: | Xxxx X. Xxxxxxx | |
| Title: | Vice President | |
[Signature Page to Terms Agreement]
| CREDIT SUISSE SECURITIES (USA) LLC | ||
| By: | /s/ Xxxxxx XxXxxx | |
| Name: | Xxxxxx XxXxxx | |
| Title: | Managing Director | |
[Signature Page to Terms Agreement]
| DEUTSCHE BANK SECURITIES INC. | ||
| By: | /s/ Xxxxx Xxxxxxxx | |
| Name: | Xxxxx Xxxxxxxx | |
| Title: | Managing Director | |
| By: | /s/ Xxxx X. XxXxxx | |
| Name: | Xxxx X. XxXxxx | |
| Title: | Managing Director | |
[Signature Page to Terms Agreement]
| ING FINANCIAL MARKETS LLC | ||
| By: | /s/ Xxxxx Xxxxxxx | |
| Name: | Xxxxx Xxxxxxx | |
| Title: | Managing Director | |
| By: | /s/ Xxxxxxx Xxxxxxx | |
| Name: | Xxxxxxx Xxxxxxx | |
| Title: | Managing Director | |
[Signature Page to Terms Agreement]
| SANTANDER INVESTMENT SECURITIES INC. | ||
| By: | /s/ Xxxxxxx X. Xxxxxx, Xx. | |
| Name: | Xxxxxxx X. Xxxxxx, Xx. | |
| Title: | Executive Director | |
| By: | /s/ Xxxxxx Xxxxxxxx | |
| Name: | Xxxxxx Xxxxxxxx | |
| Title: | Vice President | |
[Signature Page to Terms Agreement]
| Accepted: | ||
| XXXXXX XXXXXX INTERNATIONAL INC. | ||
| By: | /s/ Xxxxx de Rooij | |
| Name: | Xxxxx de Rooij | |
| Title: | Vice President Treasury and Corporate Finance | |
[Signature Page to Terms Agreement]
SCHEDULE A
DEBT SECURITIES
| Underwriters |
2019 Notes | 2022 Notes | 2028 Notes | |||||||||
| Barclays Capital Inc. |
$ | 112,500,000 | $ | 112,500,000 | $ | 75,000,000 | ||||||
| Citigroup Global Markets Inc. |
$ | 112,500,000 | $ | 112,500,000 | $ | 75,000,000 | ||||||
| Credit Suisse Securities (USA) LLC |
$ | 112,500,000 | $ | 112,500,000 | $ | 75,000,000 | ||||||
| Deutsche Bank Securities Inc. |
$ | 112,500,000 | $ | 112,500,000 | $ | 75,000,000 | ||||||
| ING Financial Markets LLC |
$ | 112,500,000 | $ | 112,500,000 | $ | 75,000,000 | ||||||
| Santander Investment Securities Inc. |
$ | 112,500,000 | $ | 112,500,000 | $ | 75,000,000 | ||||||
| BBVA Securities Inc. |
$ | 25,000,000 | $ | 25,000,000 | $ | 16,667,000 | ||||||
| Xxxxxxx Sachs & Co. LLC |
$ | 25,000,000 | $ | 25,000,000 | $ | 16,667,000 | ||||||
| UBS Securities LLC |
$ | 25,000,000 | $ | 25,000,000 | $ | 16,666,000 | ||||||
| Total |
$ | 750,000,000 | $ | 750,000,000 | $ | 500,000,000 | ||||||
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SCHEDULE B
| (a) | Issuer Free Writing Prospectuses not included in the Pricing Disclosure Package: None |
| (b) | Issuer Free Writing Prospectuses included in the Pricing Disclosure Package: Final Term Sheet, attached as Schedule C hereto |
| (c) | Additional Documents Incorporated by Reference: None |
SCHEDULE C
Filed Pursuant to Rule 433
Registration No. 333-216046
FINAL TERM SHEET
Xxxxxx Xxxxxx International Inc.
Dated October 31, 2017
| 1.875% Notes due 2019 2.500% Notes due 2022 3.125% Notes due 2028 | ||
| Issuer: |
Xxxxxx Xxxxxx International Inc. | |
| Offering Format: |
SEC Registered | |
| Security: |
1.875% Notes due November 1, 2019 (the “2019 Notes”) 2.500% Notes due November 2, 2022 (the “2022 Notes”) 3.125% Notes due March 2, 2028 (the “2028 Notes”) | |
| Aggregate Principal Amount: |
2019 Notes: $750,000,000 2022 Notes: $750,000,000 2028 Notes: $500,000,000 | |
| Maturity Date: |
2019 Notes: November 1, 2019 2022 Notes: November 2, 2022 2028 Notes: March 2, 2028 | |
| Coupon: |
2019 Notes: 1.875% 2022 Notes: 2.500% 2028 Notes: 3.125% | |
| Interest Payment Dates: |
2019 Notes: Semi-annually on each May 1 and November 1, commencing May 1, 2018 2022 Notes: Semi-annually on each May 2 and November 2, commencing May 2, 2018 2028 Notes: Semi-annually on each March 2 and September 2, commencing March 2, 2018 | |
| Price to Public: |
2019 Notes: 99.803% of principal amount 2022 Notes: 99.571% of principal amount 2028 Notes: 99.295% of principal amount | |
| Underwriting Discount: |
2019 Notes: 0.15% of principal amount | |
| 2022 Notes: 0.30% of principal amount 2028 Notes: 0.45% of principal amount | ||
| Net Proceeds: |
2019 Notes: $747,397,500 (before expenses) 2022 Notes: $744,532,500 (before expenses) 2028 Notes: $494,225,000 (before expenses) | |
| Benchmark Treasury: |
2019 Notes: 1.500% due October 31, 2019 2022 Notes: 2.000% due October 31, 2022 2028 Notes: 2.250% due August 15, 2027 | |
| Benchmark Treasury Price/Yield: |
2019 Notes: 99-26 / 1.596% 2022 Notes: 99-30 1/4 / 2.012% 2028 Notes: 98-29 / 2.376% | |
| Spread to Benchmark Treasury: |
2019 Notes: +38 basis points 2022 Notes: +58 basis points 2028 Notes: +83 basis points | |
| Yield to Maturity: |
2019 Notes: 1.976% 2022 Notes: 2.592% 2028 Notes: 3.206% | |
| Optional Redemption: |
2019 Notes: At any time: Make-whole redemption at Treasury plus 7 bps 2022 Notes: Prior to October 2, 2022: Make-whole redemption at Treasury plus 10 bps On or after October 2, 2022: Redemption at par 2028 Notes: Prior to December 2, 2027: Make-whole redemption at Treasury plus 15 bps On or after December 2, 2027: Redemption at par | |
| Settlement Date (T+2): |
November 2, 2017 | |
| CUSIP/ISIN: |
2019 Notes: CUSIP Number: 718172 CC1 ISIN Number: US718172CC11 2022 Notes: CUSIP Number: 718172 CD9 ISIN Number: US718172CD93 2028 Notes: CUSIP Number: 718172 CE7 ISIN Number: US718172CE76 | |
| Listing: |
Application will be made to list the Notes on the New York Stock Exchange | |
| Joint Book-Running Managers: |
Barclays Capital Inc. Citigroup Global Markets Inc. Credit Suisse Securities (USA) LLC | |
| Deutsche Bank Securities Inc. ING Financial Markets LLC Santander Investment Securities Inc. | ||
| Joint Co-Managers: |
BBVA Securities Inc. Xxxxxxx Sachs & Co. LLC UBS Securities LLC | |
| Allocations: |
2019 Notes | 2022 Notes | 2028 Notes | |||||||||
| Barclays Capital Inc. |
$ | 112,500,000 | $ | 112,500,000 | $ | 75,000,000 | ||||||
| Citigroup Global Markets Inc. |
$ | 112,500,000 | $ | 112,500,000 | $ | 75,000,000 | ||||||
| Credit Suisse Securities (USA) LLC |
$ | 112,500,000 | $ | 112,500,000 | $ | 75,000,000 | ||||||
| Deutsche Bank Securities Inc. |
$ | 112,500,000 | $ | 112,500,000 | $ | 75,000,000 | ||||||
| ING Financial Markets LLC |
$ | 112,500,000 | $ | 112,500,000 | $ | 75,000,000 | ||||||
| Santander Investment Securities Inc. |
$ | 112,500,000 | $ | 112,500,000 | $ | 75,000,000 | ||||||
| BBVA Securities Inc. |
$ | 25,000,000 | $ | 25,000,000 | $ | 16,667,000 | ||||||
| Xxxxxxx Xxxxx & Co. LLC |
$ | 25,000,000 | $ | 25,000,000 | $ | 16,667,000 | ||||||
| UBS Securities LLC |
$ | 25,000,000 | $ | 25,000,000 | $ | 16,666,000 | ||||||
| Total |
$ | 750,000,000 | $ | 750,000,000 | $ | 500,000,000 | ||||||
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The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting XXXXX on the SEC website at xxx.xxx.xxx. Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling Barclays Capital Inc. toll free at 0-000-000-0000, Citigroup Global Markets Inc. toll free at 1-800-831-9146, Credit Suisse Securities (USA) LLC toll free at 1-800-221-1037, Deutsche Bank Securities Inc. toll free at 1-800-503-4611, ING Financial Markets LLC at 1-646-424-6000 or Santander Investment Securities Inc. toll free at 0-000-000-0000.
