Item 1.01. Entry into a Material Definitive Agreement.
On March 26, 2018, Brown-Forman Corporation (the Company) completed the sale of $600,000,000 aggregate principal amount of
3.500% Notes due 2025 (the 2025 Notes) and $300,000,000 aggregate principal amount of 4.000% Notes due 2038 (the 2038 Notes and collectively with the 2025 Notes, the Notes). We intend to use the net proceeds from
this offering for general corporate purposes, including dividends, repurchases of stock by the Company pursuant to any authorized stock repurchase program or otherwise, repaying, redeeming or repurchasing existing debt, including commercial paper,
and for working capital, capital expenditures, acquisitions and funding our pension plan obligations. A portion of the proceeds will be used to pay the Companys recently announced special cash dividend in the aggregate amount of approximately
$480.9 million, which will be paid on April 23, 2018 to stockholders of record on April 2, 2018.
The Notes were sold
pursuant to an underwriting agreement (the Underwriting Agreement) dated March 22, 2018, among the Company, Barclays Capital Inc., Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and U.S.
Bancorp Investments, Inc., as representatives of the several underwriters named therein (collectively the Underwriters). The Underwriting Agreement contains customary representations, warranties and agreements of the Company, conditions
to closing, indemnification rights and obligations of the parties and termination provisions. The Notes were issued pursuant to an indenture (the base indenture) dated as of April 2, 2007, as supplemented by a first supplemental
indenture dated as of December 13, 2010 and a second supplemental indenture dates as of June 24, 2015 (collectively with the base indenture, the Indenture), between the Company and U.S. Bank National Association, as trustee
(the Trustee). Pursuant to the Indenture, the Company executed an Officers Certificate dated March 26, 2018 (the Officers Certificate) setting forth the terms of the Notes.
Interest on the 2025 Notes will accrue at the rate of 3.500% per year. Interest on the 2038 Notes will accrue at the rate of 4.000% per year.
Interest on the Notes will be payable semi-annually in arrears on April 15 and October 15 of each year, beginning October 15, 2018. The 2025 Notes will mature on April 15, 2025 and the 2038 Notes will mature on October 15,
2038.
The Company may redeem the Notes, in whole or in part, at any time prior to their maturity at the redemption prices set forth in
the Notes.
The Indenture provides for customary events of default and further provides that the Trustee or the holders of 51% or more in
aggregate principal amount of the outstanding Notes of a series may declare such Notes immediately due and payable upon the occurrence of any event of default after expiration of any applicable grace period.
The Notes were offered and sold by the Company pursuant to its automatic shelf registration
statement, as defined in Rule 405 of the Securities Act of 1933, as amended, on Form
S-3
(File Number
333-205183),
filed with the Securities and Exchange Commission on
June 24, 2015.
The above description of the Underwriting Agreement, the Indenture and the Notes is qualified in its entirety by
reference to the Underwriting Agreement, the Indenture, the Officers Certificate pursuant to the Indenture setting forth the terms of the Notes, the form of 3.500% Note due 2025 representing the 2025 Notes and the form of 4.000% Note due 2038
representing the 2038 Notes, which are filed as exhibits to this report and are incorporated herein by reference or are otherwise incorporated into this report by reference.
Certain of the Underwriters and their respective affiliates have provided and in the future may continue to provide investment banking,
commercial banking and other financial services, including the provision of credit facilities, to us in the ordinary course of business for which they have received and will receive customary compensation. Certain of the Underwriters and certain
affiliates of the Underwriters are parties to the Companys Credit Agreement dated as of November 10, 2017.