Bond Pepsico Inc 3% ( US713448DY13 ) in USD

Pepsico Inc

100 % ▲

United States

US713448DY13 ( in USD )

3% per year ( payment 2 times a year)

14/10/2027

Prospectus brochure of the bond Pepsico Inc US713448DY13 en USD 3%, maturity 14/10/2027

2 000 USD

1 500 000 000 USD

713448DY1

A+ ( Upper medium grade - Investment-grade )

A1 ( Upper medium grade - Investment-grade )

15/10/2025 ( In 170 days )

PepsiCo, Inc. is a multinational food, snack, and beverage corporation headquartered in Purchase, New York, with a diverse portfolio of brands including Pepsi, Lay's, Gatorade, and Quaker Oats.

The Bond issued by Pepsico Inc ( United States ) , in USD, with the ISIN code US713448DY13, pays a coupon of 3% per year.
The coupons are paid 2 times per year and the Bond maturity is 14/10/2027

The Bond issued by Pepsico Inc ( United States ) , in USD, with the ISIN code US713448DY13, was rated A1 ( Upper medium grade - Investment-grade ) by Moody's credit rating agency.

The Bond issued by Pepsico Inc ( United States ) , in USD, with the ISIN code US713448DY13, was rated A+ ( Upper medium grade - Investment-grade ) by Standard & Poor's ( S&P ) credit rating agency.

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TABLE OF CONTENTS
TABLE OF CONTENTS 2
CALCULATION OF REGISTRATION FEE

Maximum
Aggregate
Amount of
Title of Each Class of Securities Offered

Offering Price

Registration Fee(1)

Floating Rate Notes due 2018

$1,500,000,000
$186,750

2.000% Senior Notes due 2021

$1,000,000,000
$124,500

3.000% Senior Notes due 2027

$1,500,000,000
$186,750

Total

$4,000,000,000
$498,000

(1)
Calculated in accordance with Rule 457(r) under the Securities Act of 1933, as amended.
Table of Contents
Filed Pursuant to Rule 424(b)(2)
File No. 333-216082
PROSPECTUS SUPPLEMENT
(To Prospectus Dated February 15, 2017)
$4,000,000,000
PepsiCo, Inc.
$1,500,000,000 Floating Rate Notes due 2018
$1,000,000,000 2.000% Senior Notes due 2021
$1,500,000,000 3.000% Senior Notes due 2027
We are offering $1,500,000,000 of our floating rate notes due 2018 (the "floating rate notes"), $1,000,000,000 of our 2.000% senior notes due 2021 (the "2021 notes") and
$1,500,000,000 of our 3.000% senior notes due 2027 (the "2027 notes" and, together with the 2021 notes, the "fixed rate notes"). The floating rate notes and the fixed rate notes are
collectively referred to herein as the "notes." The floating rate notes will bear interest at a rate equal to three-month LIBOR per annum plus zero basis points and will mature on
October 15, 2018. The 2021 notes will bear interest at a fixed rate of 2.000% per annum and will mature on April 15, 2021. The 2027 notes will bear interest at a fixed rate of 3.000%
per annum and will mature on October 15, 2027. We will pay interest on the floating rate notes on January 15, 2018, April 15, 2018, July 15, 2018 and October 15, 2018. We will pay
interest on the fixed rate notes on April 15 and October 15 of each year until maturity, beginning on April 15, 2018. We may redeem some or all of either series of fixed rate notes at
any time and from time to time at the applicable redemption price for that series described in this prospectus supplement. The notes will be unsecured obligations and rank equally with
all of our other unsecured senior indebtedness from time to time outstanding. The notes will be issued only in registered form in denominations of $2,000 and integral multiples of $1,000
in excess thereof.
Investing in the notes involves risks. See "Risk Factors" included on page S-4 herein and "Risk Factors" and "Our Business Risks"
included in our annual report on Form 10-K for the fiscal year ended December 31, 2016, in our quarterly report on Form 10-Q for the
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12 weeks ended March 25, 2017, in our quarterly report on Form 10-Q for the 12 and 24 weeks ended June 17, 2017, and in our quarterly
report on Form 10-Q for the 12 and 36 weeks ended September 9, 2017.

Proceeds, Before
Public Offering
Underwriting
Expenses, to

Price(1)

Discount(2)

PepsiCo, Inc.(1)

Per floating rate note

100.000%

0.075%

99.925%

Floating rate notes total

$1,500,000,000

$1,125,000

$1,498,875,000

Per 2021 note

99.980%

0.250%

99.730%

2021 notes total

$999,800,000

$2,500,000

$997,300,000

Per 2027 note

99.717%

0.450%

99.267%

2027 notes total

$1,495,755,000

$6,750,000

$1,489,005,000

Total

$3,995,555,000

$10,375,000

$3,985,180,000

(1)
Plus accrued interest from October 10, 2017, if settlement occurs after that date.
(2)
The underwriters have agreed to reimburse us for certain expenses. See "Underwriting."
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus
supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The notes will not be listed on any securities exchange. Currently there is no public market for the notes.
The notes will be ready for delivery in book-entry form only through The Depository Trust Company, 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 or about October 10, 2017.
Joint Book-Running Managers
BNP PARIBAS
BofA Merrill Lynch Citigroup Goldman Sachs & Co. LLC
Senior Co-Managers
HSBC

Mizuho Securities

UBS Investment Bank
Co-Managers
ANZ Securities
Barclays
BNY Mellon Capital

ING
US Bancorp
Markets, LLC
Drexel Hamilton
Loop Capital Markets

The Williams Capital Group, L.P.
The date of this prospectus supplement is October 5, 2017.
Table of Contents
We have not authorized anyone to provide any information other than that contained or incorporated by reference in this prospectus
supplement, the accompanying prospectus or in any free writing prospectus filed by us with the U.S. Securities and Exchange Commission (the
"SEC"). We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We are
not, and the underwriters are not, making an offer to sell the notes in any jurisdiction where the offer and sale is not permitted. You should not
assume that the information contained in this prospectus supplement, the accompanying prospectus, any free writing prospectus or any document
incorporated by reference is accurate as of any date other than their respective dates. Our business, financial condition, results of operations and
prospects may have changed since those dates.
TABLE OF CONTENTS

Page
Prospectus Supplement

Special Note on Forward-Looking Statements and Risk Factors
S-1
PepsiCo, Inc.

S-2
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Risk Factors

S-4
Ratio of Earnings to Fixed Charges

S-5
Use of Proceeds

S-5
Description of Notes

S-6
United States Federal Income Tax Considerations
S-12
Underwriting
S-16
Legal Opinions
S-20
Experts
S-21
Where You Can Find More Information
S-22
Prospectus

The Company
1
About this Prospectus

3
Where You Can Find More Information

3
Special Note on Forward-Looking Statements

3
Use of Proceeds

4
Ratio of Earnings to Fixed Charges

4
Description of Capital Stock

4
Description of Debt Securities

8
Description of Warrants

18
Description of Units

19
Forms of Securities

20
Validity of Securities

21
Experts

21
As used in this prospectus supplement, unless otherwise specified or where it is clear from the context that the term only means issuer, the
terms "PepsiCo," the "Company," "we," "us," and "our" refer to PepsiCo, Inc. and its consolidated subsidiaries. Our principal executive offices
are located at 700 Anderson Hill Road, Purchase, New York 10577, and our telephone number is (914) 253-2000. We maintain a website at
www.pepsico.com where general information about us is available. We are not incorporating the contents of the website into this prospectus
supplement or the accompanying prospectus.
Table of Contents
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS AND RISK FACTORS
Certain sections of this prospectus supplement, including the documents incorporated by reference herein, contain statements reflecting our
views about our future performance that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform
Act of 1995 (the "Reform Act"). Statements that constitute forward-looking statements within the meaning of the Reform Act are generally
identified through the inclusion of words such as "aim," "anticipate," "believe," "drive," "estimate," "expect," "expressed confidence," "forecast,"
"future," "goal," "guidance," "intend," "may," "objective," "outlook," "plan," "position," "potential," "project," "seek," "should," "strategy,"
"target," "will" or similar statements or variations of such words and other similar expressions. All statements addressing our future operating
performance, and statements addressing events and developments that we expect or anticipate will occur in the future, are forward-looking
statements within the meaning of the Reform Act. These forward-looking statements are based on currently available information, operating plans
and projections about future events and trends. They inherently involve risks and uncertainties that could cause actual results to differ materially
from those predicted in any such forward-looking statement. These risks and uncertainties include, but are not limited to, those described in "Risk
Factors" included herein and "Risk Factors" and "Our Business Risks" in our annual report on Form 10-K for the fiscal year ended December 31,
2016, in our quarterly report on Form 10-Q for the 12 weeks ended March 25, 2017, in our quarterly report on Form 10-Q for the 12 and 24 weeks
ended June 17, 2017, and in our quarterly report on Form 10-Q for the 12 and 36 weeks ended September 9, 2017, and in any subsequent annual
report on Form 10-K, quarterly report on Form 10-Q or current report on Form 8-K incorporated by reference herein. Investors are cautioned not
to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. We undertake no obligation to
update any forward-looking statement, whether as a result of new information, future events or otherwise. The discussion of risks included or
incorporated by reference in this prospectus supplement is by no means all-inclusive but is designed to highlight what we believe are important
factors to consider when evaluating our future performance.
We have not authorized anyone to provide any information other than that contained in this prospectus supplement, the
accompanying prospectus, the documents incorporated by reference herein and therein and any free writing prospectus filed by us with
the SEC. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give
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you.
We are offering to sell, and seeking offers to buy, the notes described in this prospectus supplement and the accompanying prospectus only
where offers and sales are permitted. Since information that we file with the SEC in the future will automatically update and supersede information
contained in this prospectus supplement and the accompanying prospectus, you should not assume that the information contained herein or therein
is accurate as of any date other than the date on the front of the applicable document.
S-1
Table of Contents
PEPSICO, INC.
PepsiCo, Inc. was incorporated in Delaware in 1919 and reincorporated in North Carolina in 1986. We are a leading global food and beverage
company with a complementary portfolio of enjoyable brands, including Frito-Lay, Gatorade, Pepsi-Cola, Quaker and Tropicana. Through our
operations, authorized bottlers, contract manufacturers and other third parties, we make, market, distribute and sell a wide variety of convenient
and enjoyable beverages, foods and snacks, serving customers and consumers in more than 200 countries and territories.
Our Operations
We are organized into six reportable segments (also referred to as divisions), as follows:
1)
Frito-Lay North America (FLNA), which includes our branded food and snack businesses in the United States and Canada;
2)
Quaker Foods North America (QFNA), which includes our cereal, rice, pasta and other branded food businesses in the United States
and Canada;
3)
North America Beverages (NAB), which includes our beverage businesses in the United States and Canada;
4)
Latin America, which includes all of our beverage, food and snack businesses in Latin America;
5)
Europe Sub-Saharan Africa (ESSA), which includes all of our beverage, food and snack businesses in Europe and Sub-Saharan
Africa; and
6)
Asia, Middle East and North Africa (AMENA), which includes all of our beverage, food and snack businesses in Asia, Middle East
and North Africa.
Frito-Lay North America
Either independently or in conjunction with third parties, FLNA makes, markets, distributes and sells branded snack foods. These foods
include Lay's potato chips, Doritos tortilla chips, Cheetos cheese-flavored snacks, Tostitos tortilla chips, branded dips, Fritos corn chips, Ruffles
potato chips and Santitas tortilla chips. FLNA's branded products are sold to independent distributors and retailers. In addition, FLNA's joint
venture with Strauss Group makes, markets, distributes and sells Sabra refrigerated dips and spreads.
Quaker Foods North America
Either independently or in conjunction with third parties, QFNA makes, markets, distributes and sells cereals, rice, pasta and other branded
products. QFNA's products include Quaker oatmeal, Aunt Jemima mixes and syrups, Quaker Chewy granola bars, Cap'n Crunch cereal, Quaker
grits, Life cereal, Rice-A-Roni side dishes, Quaker rice cakes, Quaker simply granola and Quaker oat squares. These branded products are sold to
independent distributors and retailers.
North America Beverages
Either independently or in conjunction with third parties, NAB makes, markets, distributes and sells beverage concentrates, fountain syrups
and finished goods under various beverage brands including Pepsi, Gatorade, Mountain Dew, Aquafina, Diet Pepsi, Diet Mountain Dew, Tropicana
Pure Premium, Mist Twst and Mug. NAB also, either independently or in conjunction with third parties, makes, markets and sells ready-to-drink
tea and coffee products through joint ventures with Unilever (under the Lipton brand name) and Starbucks, respectively. Further, NAB
manufactures and distributes certain
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S-2
Table of Contents
brands licensed from Dr Pepper Snapple Group, Inc., including Dr Pepper, Crush and Schweppes, and certain juice brands licensed from Dole
Food Company, Inc. and Ocean Spray Cranberries, Inc. NAB operates its own bottling plants and distribution facilities and sells branded finished
goods directly to independent distributors and retailers. NAB also sells concentrate and finished goods for our brands to authorized and
independent bottlers, who in turn sell our branded finished goods to independent distributors and retailers in certain markets.
Latin America
Either independently or in conjunction with third parties, Latin America makes, markets, distributes and sells a number of snack food brands
including Doritos, Cheetos, Marias Gamesa, Lay's, Ruffles, Emperador, Saladitas, Rosquinhas Mabel, Sabritas and Tostitos, as well as many
Quaker-branded cereals and snacks. Latin America also, either independently or in conjunction with third parties, makes, markets, distributes and
sells beverage concentrates, fountain syrups and finished goods under various beverage brands including Pepsi, 7UP, Gatorade, Toddy, Mirinda,
Manzanita Sol, H2oh! and Diet Pepsi. These branded products are sold to authorized bottlers, independent distributors and retailers. Latin America
also, either independently or in conjunction with third parties, makes, markets and sells ready-to-drink tea through an international joint venture
with Unilever (under the Lipton brand name).
Europe Sub-Saharan Africa
Either independently or in conjunction with third parties, ESSA makes, markets, distributes and sells a number of leading snack food brands
including Lay's, Walkers, Doritos, Cheetos and Ruffles, as well as many Quaker-branded cereals and snacks, through consolidated businesses as
well as through noncontrolled affiliates. ESSA also, either independently or in conjunction with third parties, makes, markets, distributes and sells
beverage concentrates, fountain syrups and finished goods under various beverage brands including Pepsi, Pepsi Max, 7UP, Mirinda, Diet Pepsi
and Tropicana. These branded products are sold to authorized bottlers, independent distributors and retailers. In certain markets, however, ESSA
operates its own bottling plants and distribution facilities. ESSA also, either independently or in conjunction with third parties, makes, markets and
sells ready-to-drink tea products through an international joint venture with Unilever (under the Lipton brand name). In addition, ESSA makes,
markets, sells and distributes a number of leading dairy products including Chudo, Agusha and Domik v Derevne.
Asia, Middle East and North Africa
Either independently or in conjunction with third parties, AMENA makes, markets, distributes and sells a number of leading snack food
brands including Lay's, Kurkure, Chipsy, Cheetos, Doritos and Crunchy through consolidated businesses, as well as through noncontrolled
affiliates. Further, either independently or in conjunction with third parties, AMENA makes, markets, distributes and sells many Quaker-branded
cereals and snacks. AMENA also makes, markets, distributes and sells beverage concentrates, fountain syrups and finished goods under various
beverage brands including Pepsi, Mirinda, 7UP, Aquafina, Mountain Dew, and Tropicana. These branded products are sold to authorized bottlers,
independent distributors and retailers. In certain markets, however, AMENA operates its own bottling plants and distribution facilities. AMENA
also, either independently or in conjunction with third parties, makes, markets, distributes and sells ready-to-drink tea products through an
international joint venture with Unilever (under the Lipton brand name). Further, we license the Tropicana brand for use in China on co-branded
juice products in connection with a strategic alliance with Tingyi (Cayman Islands) Holding Corp.
S-3
Table of Contents
RISK FACTORS
Investing in the notes involves risks. Prior to deciding to purchase any notes, prospective investors should consider carefully all of the
information set forth in this prospectus supplement, the accompanying prospectus, any free writing prospectus filed by us with the SEC and the
documents incorporated by reference herein. In particular, you should carefully consider the factors discussed below and under "Risk Factors"
and "Our Business Risks" included in our annual report on Form 10-K for the fiscal year ended December 31, 2016, in our quarterly report on
Form 10-Q for the 12 weeks ended March 25, 2017, in our quarterly report on Form 10-Q for the 12 and 24 weeks ended June 17, 2017, and in
our quarterly report on Form 10-Q for the 12 and 36 weeks ended September 9, 2017.
Uncertainty relating to the LIBOR calculation method and potential phasing out of LIBOR after 2021 may adversely affect the value of the
floating rate notes.
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The floating rate notes offered hereby are LIBOR-based. On July 27, 2017, the U.K. Financial Conduct Authority (the "FCA") announced that
it will no longer persuade or compel banks to submit rates for the calculation of LIBOR rates after 2021. Actions by the FCA, other regulators or
law enforcement agencies may result in changes to the method by which LIBOR is calculated. At this time, it is not possible to predict the effect of
any such changes or any other reforms to LIBOR that may be enacted in the United Kingdom or elsewhere. Uncertainty as to the nature of such
potential changes may adversely affect the trading market for LIBOR-based securities, including the floating rate notes offered hereby. To the
extent the LIBOR rate is discontinued or is no longer quoted, the applicable base rate used to calculate interest on the floating rate notes offered
hereby will be determined using the alternative methods described under "Description of Debt Securities--Floating Rate Notes--Interest Periods
and Interest Rate" in the accompanying prospectus.
S-4
Table of Contents
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges for the periods indicated. "Fixed charges" consist of interest expense,
including net amortization of debt premium/discount, capitalized interest, and the interest portion of rent expense which is deemed to be
representative of the interest factor (i.e. one-third of rent expense). The ratio of earnings to fixed charges is calculated as income from continuing
operations, before provision for income taxes and cumulative effect of accounting changes, where applicable, less net unconsolidated affiliates'
interests, plus fixed charges (excluding capitalized interest), plus amortization of capitalized interest, with the sum divided by fixed charges.

36 Weeks

Year Ended

Ended
September 9,
December 31,
December 26,
December 27,
December 28,
December 29,

2017

2016

2015(3)

2014

2013

2012

Ratio of Earnings to
Fixed Charges(1),
(2)

8.51
7.25
7.09
8.49
8.84
8.53
(1)
Based on unrounded amounts.
(2)
Interest expense excludes interest related to our reserves for income taxes as such interest is included in provision for
income taxes. Interest expense for the year ended December 31, 2016 excludes pre-tax charges of $233 million related to our
redemption of certain debt securities.
(3)
Income before income taxes for the year ended December 26, 2015 included a pre-tax charge of $1.4 billion related to our
change in accounting for our investments in our wholly-owned Venezuelan subsidiaries and beverage joint venture.
USE OF PROCEEDS
The net proceeds to us from this offering are estimated to be approximately $3,984 million, after deducting underwriting discounts and
estimated offering expenses payable by us. We intend to use the net proceeds from this offering for general corporate purposes, including the
repayment of commercial paper.
S-5
Table of Contents
DESCRIPTION OF NOTES
General
The floating rate notes offered hereby will initially be limited to an aggregate principal amount of $1,500,000,000. The interest rate per annum
for the floating rate notes in any interest period will be equal to LIBOR plus zero basis points, as determined by the calculation agent. The floating
rate notes will mature on October 15, 2018. The floating rate notes will bear interest from October 10, 2017, payable quarterly on January 15,
2018, April 15, 2018, July 15, 2018 and October 15, 2018 to the persons in whose names the floating rate notes are registered at the close of
business on January 1, 2018, April 1, 2018, July 1, 2018 and October 1, 2018 (whether or not a business day), respectively, except that, as provided
in the indenture, interest paid on October 15, 2018 will be paid to the holder entitled to the payment of principal. The interest rate for the floating
rate notes will be reset quarterly on January 15, 2018, April 15, 2018 and July 15, 2018. The initial interest period for the floating rate notes will
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be the period from and including October 10, 2017 to but excluding the first interest reset date. The interest rate in effect during the initial interest
period will be determined two London business days prior to October 10, 2017. See "Description of Debt Securities--Floating Rate Notes" in the
accompanying prospectus.
The 2021 notes offered hereby will initially be limited to an aggregate principal amount of $1,000,000,000. The 2021 notes will bear interest
at a fixed rate of 2.000% per annum and will mature on April 15, 2021. The 2027 notes offered hereby will initially be limited to an aggregate
principal amount of $1,500,000,000. The 2027 notes will bear interest at a fixed rate of 3.000% per annum and will mature on October 15, 2027.
The fixed rate notes will bear interest from October 10, 2017, payable semi-annually on each April 15 and October 15, commencing on April 15,
2018, to the persons in whose names such notes are registered at the close of business on each April 1 and October 1, as the case may be (whether
or not a business day), immediately preceding such April 15 and October 15, respectively.
Each series of notes constitutes a single series of debt securities to be issued under an indenture dated May 21, 2007, between us and The
Bank of New York Mellon, as trustee. The indenture is more fully described in the accompanying prospectus.
The notes are not subject to any sinking fund.
We may, without the consent of the existing holders of a series of notes, issue additional notes of such series having the same terms (except
issue date, date from which interest accrues and, in some cases, the first interest payment date) so that in either case the existing notes and the new
notes of such series form a single series under the indenture.
The notes will be issued only in registered form in denominations of $2,000 and integral multiples of $1,000 in excess thereof.
The floating rate notes will not be redeemable. We may redeem some or all of either series of fixed rate notes at any time and from time to
time at the redemption prices for such series described under "--Optional Redemption of Fixed Rate Notes."
Defeasance
The notes of each series will be subject to defeasance and discharge (but not with respect to certain covenants) and to defeasance of certain
covenants as set forth in the indenture. See "Description of Debt Securities--Satisfaction, Discharge and Covenant Defeasance" in the
accompanying prospectus.
S-6
Table of Contents
Optional Redemption of Fixed Rate Notes
The fixed rate notes will be redeemable as a whole or in part, at our option at any time and from time to time prior to March 15, 2021 (one
month prior to the maturity date of the 2021 notes) (the "2021 notes par call date") with respect to the 2021 notes, and prior to July 15, 2027 (three
months prior to the maturity date of the 2027 notes) (the "2027 notes par call date") with respect to the 2027 notes, at a redemption price equal to
the greater of:
·
100% of the principal amount of such notes of such series and
·
the sum of the present values of the remaining scheduled payments of principal and interest thereon (exclusive of interest accrued to
the date of redemption), assuming for such purpose that the 2021 notes and 2027 notes matured on the 2021 notes par call date and
2027 notes par call date, respectively, discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting
of twelve 30-day months) at the Treasury Rate plus 10 basis points with respect to the 2021 notes, and 15 basis points with respect
to the 2027 notes,
plus in each case accrued and unpaid interest to the date of redemption.
The fixed rate notes will be redeemable as a whole or in part, at our option at any time and from time to time on or after the 2021 notes par
call date and the 2027 notes par call date, as applicable, at a redemption price equal to 100% of the principal amount of the notes being redeemed,
plus accrued and unpaid interest to the date of redemption.
"Comparable Treasury Issue" means the United States Treasury security or securities selected by an Independent Investment Banker as having
an actual or interpolated maturity comparable to the remaining term of either series of fixed rate notes to be redeemed, assuming for such purpose
that the 2021 notes matured on the 2021 notes par call date and the 2027 notes matured on the 2027 notes par call date (the "Remaining Term"),
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that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt
securities of a comparable maturity to the Remaining Term.
"Comparable Treasury Price" means, with respect to any redemption date for either series of fixed rate notes, (A) the average of the Reference
Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (B) if
the Independent Investment Banker obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.
"Independent Investment Banker" means one of the Reference Treasury Dealers appointed by us.
"Reference Treasury Dealer" means each of any four primary U.S. Government securities dealers in the United States of America selected by
us.
"Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as
determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Independent Investment Banker by such Reference Treasury Dealer at 3:30 p.m. New
York time on the third business day preceding such redemption date.
"Treasury Rate" means, with respect to any redemption date for either series of fixed rate notes, the rate per annum equal to the semiannual
equivalent yield to maturity or interpolated (on a day count basis) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.
Notice of any redemption will be transmitted at least 30 days but not more than 60 days before the redemption date to each holder of either
series of fixed rate notes to be redeemed. If fewer than all of a
S-7
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series of notes are to be redeemed, the particular notes of such series to be redeemed, in the case of global notes, shall be selected in accordance
with the procedures of DTC. In the case of physical notes in definitive form such selection shall be done by the trustee by lot. If any note is to be
redeemed only in part, the notice of redemption that relates to such note shall state the principal amount thereof to be redeemed. A new note in
principal amount equal to and in exchange for the unredeemed portion of the principal of the note surrendered may be issued in the name of the
holder of the note upon surrender of the original note.
Unless we default in payment of the redemption price, on and after the redemption date interest will cease to accrue on the notes of a series or
portions thereof called for redemption.
The trustee will not be responsible for calculating the redemption price of the notes or portions thereof called for redemption.
Book-Entry System
The notes of each series will be issued in fully registered form in the name of Cede & Co., as nominee of The Depository Trust Company
("DTC"). One or more fully registered certificates will be issued as global notes in the aggregate principal amount of the notes of each series. Such
global notes will be deposited with or on behalf of DTC and may not be transferred except as a whole by DTC to a nominee of DTC or by a
nominee of DTC to DTC or another nominee of DTC or by DTC or any nominee to a successor of DTC or a nominee of such successor.
So long as DTC, or its nominee, is the registered owner of a global note, DTC or such nominee, as the case may be, will be considered the sole
owner or holder of the notes represented by such global note for all purposes under the indenture. Except as set forth in the accompanying
prospectus, owners of beneficial interests in a global note will not be entitled to have the notes represented by such global note registered in their
names, will not receive or be entitled to receive physical delivery of such notes in definitive form and will not be considered the owners or holders
thereof under the indenture. Accordingly, each person owning a beneficial interest in a global note must rely on the procedures of DTC for such
global note and, if such person is not a participant in DTC (as described below), on the procedures of the participant through which such person
owns its interest, to exercise any rights of a holder under the indenture.
Owners of beneficial interests in a global note may elect to hold their interests in such global note either in the United States through DTC or
outside the United States through Clearstream Banking, société anonyme ("Clearstream") or Euroclear Bank, S.A./N.V., or its successor, as
operator of the Euroclear System ("Euroclear"), if they are a participant of such system, or indirectly through organizations that are participants in
such systems. Interests held through Clearstream and Euroclear will be recorded on DTC's books as being held by the U.S. depositary for each of
Clearstream and Euroclear, which U.S. depositaries will in turn hold interests on behalf of their participants' customers' securities accounts.
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Citibank, N.A. will act as depositary for Clearstream and JPMorgan Chase Bank, N.A. will act as depositary for Euroclear (in such capacities, the
"U.S. Depositaries").
As long as the notes of a series are represented by the global notes, we will pay principal of and interest on those notes to or as directed by
DTC as the registered holder of the global notes. Payments to DTC will be in immediately available funds by wire transfer. DTC will credit the
relevant accounts of their participants on the applicable date. Neither we nor the trustee will be responsible for making any payments to participants
or customers of participants or for maintaining any records relating to the holdings of participants and their customers, and each person owning a
beneficial interest will have to rely on the procedures of the depositary and its participants.
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We have been advised by DTC, Clearstream and Euroclear, respectively, as follows:
DTC
DTC has advised us 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 provisions of Section 17A of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). DTC holds securities deposited with it by its participants and facilitates the settlement of transactions
among its participants in such securities through electronic computerized book-entry changes in accounts of the participants, thereby eliminating
the need for physical movement of securities certificates. DTC's participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations, some of whom (and/or their representatives) own DTC. Access to DTC's book-entry system
is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly. According to DTC, the foregoing information with respect to DTC has been provided to the financial
community for informational purposes only and is not intended to serve as a representation, warranty or contract modification of any kind.
Clearstream
Clearstream advises that it is incorporated under the laws of Luxembourg as a professional depositary. Clearstream holds securities for its
participating organizations ("Clearstream Participants") and facilitates the clearance and settlement of securities transactions between Clearstream
Participants through electronic book-entry changes in accounts of Clearstream Participants, thereby eliminating the need for physical movement of
certificates. Clearstream, Luxembourg provides to Clearstream Participants, among other things, services for safekeeping, administration,
clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream interfaces with domestic markets in
several countries. As a professional depositary, Clearstream is subject to regulation by the Luxembourg Commission for the Supervision of the
Financial Sector (Commission de Surveillance du Secteur Financier). Clearstream Participants are recognized financial institutions around the
world, including underwriters, securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations and may
include the underwriters. Indirect access to Clearstream is also available to others, such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a Clearstream Participant, either directly or indirectly.
Distributions with respect to interests in the notes held beneficially through Clearstream will be credited to cash accounts of Clearstream
Participants in accordance with its rules and procedures, to the extent received by the U.S. Depositary for Clearstream.
Euroclear
Euroclear advises that it was created in 1968 to hold securities for participants of Euroclear ("Euroclear Participants") and to clear and settle
transactions between Euroclear Participants through simultaneous electronic book-entry delivery against payment, thereby eliminating the need for
physical movement of certificates and any risk from lack of simultaneous transfers of securities and cash. Euroclear includes various other services,
including securities lending and borrowing and interfaces with domestic markets in several countries. Euroclear is operated by Euroclear
Bank S.A./N.V. (the "Euroclear Operator"). All operations are conducted by the Euroclear Operator, and all Euroclear securities clearance accounts
and Euroclear cash accounts are accounts with the Euroclear Operator. Euroclear Participants include banks (including central banks), securities
brokers and dealers and other professional financial intermediaries and may include the underwriters. Indirect access to Euroclear is
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also available to other firms that clear through or maintain a custodial relationship with a Euroclear Participant, either directly or indirectly.
The Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear System, or the Euroclear Terms
and Conditions, and applicable Belgian law govern securities clearance accounts and cash accounts with the Euroclear Operator. Specifically, these
terms and conditions govern:
·
transfers of securities and cash within Euroclear;
·
withdrawal of securities and cash from Euroclear; and
·
receipt of payments with respect to securities in Euroclear.
All securities in Euroclear are held on a fungible basis without attribution of specific certificates to specific securities clearance accounts. The
Euroclear Operator acts under the terms and conditions only on behalf of Euroclear Participants and has no record of or relationship with persons
holding securities through Euroclear Participants.
Distributions with respect to interests in the notes held beneficially through Euroclear will be credited to the cash accounts of Euroclear
Participants in accordance with the Euroclear Terms and Conditions, to the extent received by the U.S. Depositary for the Euroclear Operator.
Settlement
Investors in the notes of each series will be required to make their initial payment for the notes of such series in immediately available funds.
Secondary market trading between DTC participants will occur in the ordinary way in accordance with DTC rules and will be settled in
immediately available funds. Secondary market trading between Clearstream Participants and/or Euroclear Participants will occur in the ordinary
way in accordance with the applicable rules and operating procedures of Clearstream and Euroclear and will be settled using the procedures
applicable to conventional eurobonds in immediately available funds.
Cross-market transfers between persons holding directly or indirectly through DTC, on the one hand, and directly or indirectly through
Clearstream Participants or Euroclear Participants, on the other, will be effected in DTC in accordance with DTC rules on behalf of the relevant
European international clearing system by the U.S. depositary for such clearing system; however, such cross-market transactions will require
delivery of instructions to the relevant European international clearing system by the counterparty in such system in accordance with its rules and
procedures and within its established deadlines (based on European time). The relevant European international clearing system will, if the
transaction meets its settlement requirements, deliver instructions to the U.S. Depositary to take action to effect final settlement on its behalf by
delivering or receiving notes in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement
applicable to DTC. Clearstream Participants and Euroclear Participants may not deliver instructions directly to their respective U.S. Depositaries.
Because of time-zone differences, credits of notes received in Clearstream or Euroclear as a result of a transaction with a DTC participant will
be made during subsequent securities settlement processing and dated the business day following the DTC settlement date. Such credits or any
transactions in such notes settled during such processing will be reported to the relevant Clearstream Participants or Euroclear Participants on such
business day. Cash received in Clearstream or Euroclear as a result of sales of notes by or through a Clearstream Participant or a Euroclear
Participant to a DTC participant will be received with value on the DTC settlement date but will be available in the relevant Clearstream or
Euroclear cash account only as of the business day following settlement in DTC.
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Although DTC, Clearstream and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of notes among participants
of DTC, Clearstream and Euroclear, they are under no obligation to perform or continue to perform such procedures and such procedures may be
discontinued at any time. See "Forms of Securities" in the accompanying prospectus.
The information in this section concerning DTC, Clearstream, Euroclear and DTC's book-entry system has been obtained from sources that
we believe to be reliable (including DTC, Clearstream and Euroclear), but we take no responsibility for the accuracy thereof.
Neither we, the trustee nor the underwriters will have any responsibility or obligation to participants, or the persons for whom they act as
nominees, with respect to the accuracy of the records of DTC, its nominee or any participant with respect to any ownership interest in the notes or
payments to, or the providing of notice to participants or beneficial owners.
For other terms of the notes, see "Description of Debt Securities" in the accompanying prospectus.
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