Gilead Sciences,Inc. (NASDAQ:GILD) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement.
Supplemental Indenture
On September21, 2017, Gilead Sciences,Inc. (the “Company”) and Wells Fargo Bank, National Association, as trustee (the “Trustee” and, together with the Company, the “Parties”), entered into a Seventh Supplemental Indenture (the “Seventh Supplemental Indenture”) to the Indenture between the Parties, dated as of March30, 2011 (the “Base Indenture”). The Seventh Supplemental Indenture relates to the Company’s issuance of (a)$750,000,000 aggregate principal amount of the Company’s Floating Rate Notes due September2018 (the “September2018 Floating Rate Notes”), (b)$750,000,000 aggregate principal amount of the Company’s Floating Rate Notes due March2019 (the “March2019 Floating Rate Notes”), (c)$500,000,000 aggregate principal amount of the Company’s Floating Rate Notes due September2019 (the “September2019 Floating Rate Notes” and, collectively with the September2018 Floating Rate Notes and the March2019 Floating Rate Notes, the “Floating Rate Notes”) and (d)$1,000,000,000 aggregate principal amount of the Company’s 1.850% Senior Notes due 2019 (the “Fixed Rate Notes” and, collectively with the Floating Rate Notes, the “Notes”). The Notes were sold in a public offering to the Company’s Registration Statement on FormS-3 (File No.333-220283).
The Fixed Rate Notes will pay interest semi-annually at a rate of 1.850% per annum until September20, 2019. The Floating Rate Notes will pay interest each March20, June20, September20 and December20 until their respective maturity dates. The initial interest rate for the September2018 Floating Rate Notes, the March2019 Floating Rate Notes and the September2019 Floating Rate Notes will be the Three Month LIBOR (as defined in the Supplemental Indenture), as initially determined on September19, 2017, plus 0.170% with respect to the September2018 Floating Rate Notes, 0.220% with respect to the March2019 Floating Rate Notes and 0.250% with respect to the September2019 Floating Rate Notes. The interest rate for the Floating Rate Notes for each interest period after the initial interest period will be the Three Month LIBOR, as determined on the applicable Interest Determination Date (as defined in the Supplemental Indenture), plus 0.170% with respect to the September2018 Floating Rate Notes, 0.220% with respect to the March2019 Floating Rate Notes and 0.250% with respect to the September2019 Floating Rate Notes.
The Company intends to use the net proceeds from the sale of the Notes, together with other sources of liquidity, to finance the cash consideration payable in connection with the Company’s previously announced acquisition (the “Kite Acquisition”) of Kite Pharma,Inc., a Delaware corporation (“Kite”), to the Agreement and Plan of Merger, dated August27, 2017, among Kite, the Company and Dodgers Merger Sub,Inc., a Delaware corporation (the “Merger Agreement”), and to pay related fees and expenses. Pending that application of funds, the Company intends to invest the net proceeds from this offering in United States government obligations, bank deposits or other secure, short-term investments.
The Base Indenture and the Seventh Supplemental Indenture contain certain restrictions, including a limitation that restricts the Company’s ability and ability of certain of its subsidiaries to create or incur secured indebtedness, enter into sale and leaseback transactions and consolidate, merge or transfer all or substantially all of the Company’s assets and the assets of its
