| Item 1.01 | Entry into a Material Definitive Agreement. |
On August 15, 2024, Zimmer Biomet Holdings, Inc. (the “Company”) completed its previously announced issuance of $700,000,000 aggregate principal amount of the Company’s 5.200% notes due 2034 (the “Notes”).
The Notes were issued pursuant to the Tenth Supplemental Indenture dated as of August 15, 2024 (the “Supplemental Indenture”), to the Company’s Indenture (the “Base Indenture”) dated as of November 17, 2009, between the Company and Computershare Trust Company, N.A., as successor to Wells Fargo Bank, National Association, as trustee. For a description of the material terms of the Supplemental Indenture and the Notes, see the information set forth below under Item 2.03, which is incorporated into this Item 1.01.
The offering of the Notes was made pursuant to the Registration Statement on Form S-3 (Registration No. 333-263051), the prospectus dated February 25, 2022, and the related prospectus supplement dated August 8, 2024.
Copies of the Base Indenture and the Supplemental Indenture are attached hereto as Exhibits 4.1 and 4.2, respectively, and are incorporated herein by reference.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth above under Item 1.01 is incorporated into this Item 2.03.
The Notes bear interest at a rate of 5.200% per annum, which interest will be payable semi-annually in arrears on March 15 and September 15 of each year, commencing on March 15, 2025. Interest will be paid to the holders of record of the Notes at the close of business on the March 1 and September 1, respectively, immediately preceding the related interest payment date. The Notes will mature on September 15, 2034.
Prior to June 15, 2034 (the “Par Call Date”), the Company may redeem the Notes at its option, in whole or in part, at any time and from time to time, at a redemption price (expressed as a percentage of principal amount and rounded to three decimal places) equal to the greater of:
| | (1) | (a) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date (assuming the Notes matured on the Par Call Date) on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined in the Supplemental Indenture), plus 20 basis points less (b) interest accrued to the date of redemption; and |
| | (2) | 100% of the principal amount of the Notes to be redeemed; |
plus, in either case, accrued and unpaid interest thereon to the redemption date.
On or after the Par Call Date, the Company may redeem the Notes, in whole or in part, at any time and from time to time, at a redemption price equal to 100% of the principal amount of the Notes being redeemed plus accrued and unpaid interest thereon to the redemption date.
If a Change of Control Repurchase Event (as defined in the Supplemental Indenture) occurs with respect to the Notes, unless the Company has exercised its right to redeem the Notes pursuant to the Base Indenture as supplemented by the Supplemental Indenture, the Company will make an offer to each holder of such Notes to repurchase all or any part of that holder’s Notes at a repurchase price in cash equal to 101% of the aggregate principal amount of the Notes repurchased plus any accrued and unpaid interest on the Notes repurchased to the date of repurchase.
The Base Indenture and Supplemental Indenture provide for customary events of default, including, among other things, nonpayment, failure to comply with the other covenants, warranties and agreements in the Base Indenture and Supplemental Indenture for a period of 60 days after notice thereof, and certain events of bankruptcy, insolvency and reorganization.
