VF Corporation (NYSE: VFC) announced today that its previously announced offering of €500 million aggregate principal amount of unsecured senior notes due 2028 (the “2028 Notes”) priced at 99.362% of the aggregate principal amount with a coupon of 0.250% and its €500 million aggregate principal amount of unsecured senior notes due 2032 (the “2032 Notes” and, together with the 2028 Notes, the “Notes”) priced at 98.673% of the aggregate principal amount with a coupon of 0.625%. The sale of the Notes was underwritten by Barclays, BofA Securities and Morgan Stanley as joint book-running managers. Morgan Stanley was the Green Structuring Agent for the 2028 Notes.
The notes offering is expected to close on February 25, 2020, subject to customary closing conditions.
The company intends to use the net proceeds from the offering to fund tender offers to purchase for cash (the “Tender Offers”) any and all of its outstanding 6.000% Notes due 2033 (the “2033 Notes”) and any and all of its outstanding 6.450% Notes due 2037 (the “2037 Notes”) or to repay borrowings under its commercial paper program used to fund the Tender Offers, to fund the redemption of all of its outstanding 3.500% Notes due 2021 (the “2021 Notes”) and to pay accrued and unpaid interest, premiums, fees and expenses in connection with the Tender Offers. The Tender Offers are being made pursuant to an Offer to Purchase dated February 3, 2020. The company intends to use any remaining proceeds for general corporate purposes.
The offering of the Notes is not contingent on the completion of the Tender Offers. The foregoing does not constitute an offer to purchase, or a notice of redemption or an obligation to issue a notice of redemption for, the 2033 Notes, 2037 Notes, 2021 Notes or any other notes.
The company intends to use an amount equivalent to the net proceeds from the offering of the 2028 Notes to finance, in whole or in part, one or more Eligible Projects designed to contribute to selected Sustainable Development Goals as defined by the United Nations. These Eligible Projects include new, existing and prior investments made by the company during the period from three years prior to the date of issuance of the 2028 Notes through the maturity date of such Notes, in the following categories:
- Investments in, or expenditures on, identifying and/or developing innovative and more sustainable materials and/or sustainable packaging solutions.
- Investments in, or expenditures on, the acquisition, development, construction and/or installation of, renewable energy production units or energy storage units.
- Investments in projects to improve the energy efficiency and/or reduce the greenhouse gas footprint of our operations and supply chain.
- Investments in sustainable building design features and in buildings that receive a third-party verified certification of Leadership in Energy and Environmental Design (“LEED”) Platinum, LEED Gold, or Building Research Establishment Environmental Assessment Method (“BREEAM”) rating of Very Good or higher.
- Investments to achieve the zero-waste status for all the company’s distribution centers (with zero-waste defined as a site that diverts 95% or more of its waste away from disposal through recycling, composting and reuse).
- Upgrade costs for improvement of wastewater quality across the supply chain.
- Investments in “natural carbon sinks,” which are designed to create and restore natural sources of carbon capture, such as reforestation conservation projects, and investments in regenerative farming, grazing and ranching practices.
The company plans to publish annual updates on the net proceeds of the 2028 Notes, including, subject to any confidentiality considerations, descriptions of selected projects funded with such proceeds, and to the extent possible, their environmental impacts. These updates will be reported publicly on the Sustainability & Responsibility section of its website starting one year from the date hereof and during the term of the 2028 Notes until the company has allocated an amount equivalent to the net proceeds from the sale of the 2028 Notes to finance, in whole or in part, one or more Eligible Projects.
In connection with the 2028 Notes, the company worked with Sustainalytics U.S., Inc. – an outside consultant with recognized expertise in environmental, social and governance research and analysis – to obtain an independent second-party opinion.
The company has filed a registration statement (including a prospectus and related preliminary prospectus supplement for the offering) with the Securities and Exchange Commission (the “SEC”) for the offering to which this communication relates. Before you invest, you should read the preliminary prospectus supplement, the accompanying prospectus in that registration statement and the other documents the company has filed with the SEC for more complete information about the company and this offering. You may get these documents for free by visiting EDGAR on the SEC’s website at www.sec.gov. Alternatively, the company, any underwriter or any dealer participating in the offering will arrange to send you the preliminary prospectus supplement and the accompanying prospectus if you request it by contacting Barclays Capital Inc. c/o Broadridge Financial Solutions by mail at 1155 Long Island Avenue, Edgewood, NY, 11717, by email at firstname.lastname@example.org, or by calling 888-603-5847; Merrill Lynch International by calling 1-800-294-1322; or Morgan Stanley & Co. International plc, care of Morgan Stanley & Co. LLC by mail at 180 Varick Street, 2nd Floor, New York, NY 10014 Attn: Prospectus Department, by email at email@example.com, or by calling 866-718-1649.
This press release shall not constitute an offer to sell nor a solicitation of an offer to buy any securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful. The offering of the Notes may be made only by means of a prospectus supplement and the accompanying prospectus.
Founded in 1899, VF Corporation is one of the world’s largest apparel, footwear and accessories companies connecting people to the lifestyles, activities and experiences they cherish most through a family of iconic outdoor, active and workwear brands including Vans®, The North Face®, Timberland® and Dickies®. Our purpose is to power movements of sustainable and active lifestyles for the betterment of people and our planet. We connect this purpose with a relentless drive to succeed to create value for all stakeholders and use our company as a force for good. For more information, please visit vfc.com.
Forward Looking Statements
Certain statements included in this release and attachments are "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting VF and therefore involve several risks and uncertainties. You can identify these statements by the fact that they use words such as “will,” “anticipate,” “estimate,” “expect,” “should,” and “may” and other words and terms of similar meaning or use of future dates. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. Potential risks and uncertainties that could cause the actual results of operations or financial condition of VF to differ materially from those expressed or implied by forward-looking statements in this release include, but are not limited to: risks associated with the spin-off of our Jeanswear business completed on May 22, 2019, including the risk that VF will not realize all of the expected benefits of the spin-off; and the risk that the spin-off will not be tax-free for U.S. federal income tax purposes; the risk that there will be a loss of synergies from separating the businesses that could negatively impact the balance sheet, profit margins or earnings of VF. There are also risks associated with the relocation of our global headquarters and a number of brands to the metro Denver area, including the risk of significant disruption to our operations, the temporary diversion of management resources and loss of key employees who have substantial experience and expertise in our business, the risk that we may encounter difficulties retaining employees who elect to transfer and attracting new talent in the Denver area to replace our employees who are unwilling to relocate, the risk that the relocation may involve significant additional costs to us and that the expected benefits of the move may not be fully realized. Other risks include foreign currency fluctuations; the level of consumer demand for apparel, footwear and accessories; disruption to VF’s distribution system; the financial strength of VF's customers; fluctuations in the price, availability and quality of raw materials and contracted products; disruption and volatility in the global capital and credit markets; VF's response to changing fashion trends, evolving consumer preferences and changing patterns of consumer behavior, intense competition from online retailers, manufacturing and product innovation; increasing pressure on margins; VF's ability to implement its business strategy; VF's ability to grow its international and direct-to-consumer businesses; VF’s and its vendors’ ability to maintain the strength and security of information technology systems; the risk that VF's facilities and systems and those of our third-party service providers may be vulnerable to and unable to anticipate or detect data security breaches and data or financial loss; VF's ability to properly collect, use, manage and secure consumer and employee data; stability of VF's manufacturing facilities and foreign suppliers; continued use by VF's suppliers of ethical business practices; VF’s ability to accurately forecast demand for products; continuity of members of VF’s management; VF's ability to protect trademarks and other intellectual property rights; possible goodwill and other asset impairment; maintenance by VF’s licensees and distributors of the value of VF’s brands; VF's ability to execute and integrate acquisitions; changes in tax laws and liabilities; legal, regulatory, political and economic risks; the risk of economic uncertainty associated with the exit of the United Kingdom from the European Union ("Brexit") or any other similar referendums that may be held; and adverse or unexpected weather conditions. More information on potential factors that could affect VF’s financial results is included from time to time in VF’s public reports filed with the SEC, including VF’s Annual Report on Form 10-K, and Quarterly Reports on Form 10-Q, and Forms 8-K filed or furnished with the SEC.
Vice President, Corporate Development, Investor Relations and Treasury
Vice President, Corporate Affairs