FedEx Corp. Announces Notice for the Redemption of Notes

Rhea-AI Summary

FedEx Corp. (NYSE: FDX) announced the redemption of multiple outstanding notes totaling approximately $3.5 billion. This includes $500 million in 3.400% notes due 2022, €640 million in 0.700% notes due 2022, and $1 billion in 3.800% notes due 2025, among others. The redemptions are set to occur between April 30 and May 20, 2021, with specific prices calculated based on present values. FedEx will also pay all accrued interest up to the redemption dates. These actions support the company's financial strategy and enhance its capital structure.

Positive

• FedEx is redeeming approximately $3.5 billion in outstanding notes, improving its capital structure.
• The redemption supports FedEx's financial strategy and could result in lower interest expenses.

Negative

• None.

FedEx Corp. (NYSE: FDX) (“FedEx”) announced that it has issued notices of redemption of all of its outstanding:

1. $500,000,000 aggregate principal amount of 3.400% notes due 2022 (the “2022-1 Notes”) to be redeemed on April 30, 2021 at an aggregate redemption price equal to the greater of (i) 100% of the principal amount of the 2022-1 Notes; and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the 2022-1 Notes (not including any portion of such payments of interest accrued as of April 30, 2021), discounted to April 30, 2021 on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months, at the Adjusted Treasury Rate plus 0.15% (15 basis points). FedEx will also pay all interest accrued and unpaid on the 2022-1 Notes to April 30, 2021. The paying agent for the redemption of the 2022-1 Notes is Wells Fargo Bank, N.A., Corporate Trust Operations, MAC N9300-070, 600 South Fourth Street, Minneapolis, MN 55402. Capitalized terms used in this paragraph and not defined herein are used as defined in the Indenture dated as of October 23, 2015, by and between FedEx, the Guarantors named therein and Wells Fargo, National Association, as trustee, as supplemented and amended by Supplemental Indenture No. 7 dated as of January 16, 2019.
   
2. €640,000,000 aggregate principal amount of 0.700% notes due 2022 (the “2022-2 Notes”) (NYSE: FDX 22B) to be redeemed on May 5, 2021, at an aggregate redemption price to be calculated on the third business day prior to May 5, 2021 and equal to the greater of (i) 100% of the principal amount of the 2022-2 Notes; and (ii) the sum of the present values of the Remaining Scheduled Payments of principal and interest on the 2022-2 Notes (not including any portion of such payments of interest accrued as of May 5, 2021), discounted to May 5, 2021 on an ACTUAL/ACTUAL (ICMA) day count basis, at the Comparable Government Bond Rate plus 0.20% (20 basis points). FedEx will also pay all interest accrued and unpaid on the 2022-2 Notes to May 5, 2021. The paying agent for the redemption of the 2022-2 Notes is Elavon Financial Services DAC, UK Branch, Fifth Floor, 125 Old Broad Street, London EC2N 1AR, United Kingdom. Capitalized terms used in this paragraph and not defined herein are used as defined in the Indenture dated as of October 23, 2015, by and between FedEx, the Guarantors named therein and Wells Fargo, National Association, as trustee, as supplemented and amended by Supplemental Indenture No. 8 dated as of January 18, 2019.
   
3. $500,000,000 aggregate principal amount of 2.625% notes due 2022 (the “2022-3 Notes”) to be redeemed on May 20, 2021, at an aggregate redemption price equal to the greater of (i) 100% of the principal amount of the 2022-3 Notes; and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the 2022-3 Notes, discounted to May 20, 2021 on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months, at the Adjusted Treasury Rate plus 0.20% (20 basis points). FedEx will also pay all interest accrued on the 2022-3 Notes to May 20, 2021. The paying agent for the 2022-3 Notes is The Bank of New York Mellon, Global Corporate Trust, 111 Sanders Creek Parkway, East Syracuse, NY 13057. Capitalized terms used in this paragraph and not defined herein are used as defined in the Indenture dated as of August 8, 2006, by and between FedEx, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee, as supplemented and amended by Supplemental Indenture No. 3 dated as of July 27, 2012.
   
4. $250,000,000 aggregate principal amount of 2.700% notes due 2023 (the “2023-1 Notes”) to be redeemed on May 20, 2021, at an aggregate redemption price equal to the greater of (i) 100% of the principal amount of the 2023-1 Notes; and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the 2023-1 Notes (not including any portion of such payments of interest accrued as of May 20, 2021), discounted to May 20, 2021 on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months, at the Adjusted Treasury Rate plus 0.15% (15 basis points). FedEx will also pay all interest accrued on the 2023-1 Notes to May 20, 2021. The paying agent for the 2023-1 Notes is The Bank of New York Mellon, Global Corporate Trust, 111 Sanders Creek Parkway, East Syracuse, NY 13057. Capitalized terms used in this paragraph and not defined herein are used as defined in the Indenture dated as of August 8, 2006, by and between FedEx, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee, as supplemented and amended by Supplemental Indenture No. 4 dated as of April 11, 2013.
   
5. €750,000,000 aggregate principal amount of 1.000% notes due 2023 (the “2023-2 Notes”) (NYSE: FDX 23A) to be redeemed on May 20, 2021. The redemption price for the 2023-2 Notes to be redeemed will be calculated on the third business day prior to May 20, 2021 and will be equal to the greater of (i) 100% of the principal amount of the 2023-2 Notes; and (ii) the sum of the present values of the Remaining Scheduled Payments of principal and interest on the 2023-2 Notes that would be due if the 2023-2 Notes matured on the Par Call Date (not including any portion of such payments of interest accrued as of May 20, 2021), discounted to May 20, 2021 on an ACTUAL/ACTUAL (ICMA) day count basis, at the Comparable Government Bond Rate plus 0.20% (20 basis points). FedEx will also pay all interest accrued and unpaid on the 2023-2 Notes to May 20, 2021. The Paying Agent is Elavon Financial Services DAC, UK Branch, Fifth Floor, 125 Old Broad Street, London EC2N 1AR, United Kingdom. Capitalized terms used in this paragraph and not defined herein are used as defined in the Indenture dated as of October 23, 2015, by and between FedEx, the Guarantors named therein and Wells Fargo, National Association, as trustee, as supplemented and amended by Supplemental Indenture No. 3 dated as of April 11, 2016.
   
6. $750,000,000 aggregate principal amount of 4.000% notes due 2024 (the “2024 Notes”) to be redeemed on May 20, 2021, at an aggregate redemption price equal to the greater of (i) 100% of the principal amount of the 2024 Notes; and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the 2024 Notes (not including any portion of such payments of interest accrued as of May 20, 2021), discounted to May 20, 2021 on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months, at the Adjusted Treasury Rate plus 0.15% (15 basis points). FedEx will also pay all interest accrued on the 2024 Notes to May 20, 2021. The paying agent of the 2024 Notes is The Bank of New York Mellon, Global Corporate Trust, 111 Sanders Creek Parkway, East Syracuse, NY 13057. Capitalized terms used in this paragraph and not defined herein are used as defined in the Indenture dated as of August 8, 2006, by and between FedEx, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee, as supplemented and amended by Supplemental Indenture No. 5 dated as of January 9, 2014.
   
7. $700,000,000 aggregate principal amount of 3.200% notes due 2025 (the “2025-1 Notes”) to be redeemed on May 20, 2021, at an aggregate redemption price equal to the greater of (i) 100% of the principal amount of the 2025-1 Notes; and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the 2025-1 Notes (not including any portion of such payments of interest accrued as of May 20, 2021), discounted to May 20, 2021 on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months, at the Adjusted Treasury Rate plus 0.20% (20 basis points). FedEx will also pay all interest accrued on the 2025-1 Notes to May 20, 2021. The paying agent for the 2025-1 Notes is The Bank of New York Mellon, Global Corporate Trust, 111 Sanders Creek Parkway, East Syracuse, NY 13057. Capitalized terms used in this paragraph and not defined herein are used as defined in the Indenture dated as of August 8, 2006, by and between FedEx, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee, as supplemented and amended by Supplemental Indenture No. 6 dated as of January 9, 2015.
   
8. $1,000,000,000 aggregate principal amount of 3.800% notes due 2025 (the “2025-2 Notes”) to be redeemed on April 30, 2021, at an aggregate redemption price equal to the greater of (i) 100% of the principal amount of the 2025-2 Notes; and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the 2025-2 Notes that would be due if the 2025-2 Notes matured on the Par Call Date (not including any portion of such payments of interest accrued as of April 30, 2021), discounted to April 30, 2021 on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months, at the Adjusted Treasury Rate plus 0.50% (50 basis points). FedEx will also pay all interest accrued and unpaid on the 2025-2 Notes to April 30, 2021. The paying agent for the 2025-2 Notes is Wells Fargo Bank, N.A., Corporate Trust Operations, MAC N9300-070, 600 South Fourth Street, Minneapolis, MN 55402. Capitalized terms used in this paragraph and not defined herein are used as defined in the Indenture dated as of October 23, 2015, by and between FedEx, the Guarantors named therein and Wells Fargo, National Association, as trustee, as supplemented and amended by Supplemental Indenture No. 11 dated as of April 7, 2020.
   
9. $450,000,000 aggregate principal amount of 3.300% notes due 2027 (the “2027 Notes”) to be redeemed on May 20, 2021, at an aggregate redemption price equal to the greater of (i) 100% of the principal amount of the 2027 Notes; and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the 2027 Notes that would be due if the 2027 Notes matured on the Par Call Date (not including any portion of such payments of interest accrued as of May 20, 2021), discounted to May 20, 2021 on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months, at the Adjusted Treasury Rate plus 0.15% (15 basis points). FedEx will also pay all interest accrued and unpaid on the 2027 Notes to May 20, 2021. The paying agent of the 2027 Notes is Wells Fargo Bank, N.A., Corporate Trust Operations, MAC N9300-070, 600 South Fourth Street, Minneapolis, MN 55402. Capitalized terms used in this paragraph and not defined herein are used as defined in the Indenture dated as of October 23, 2015, by and between FedEx, the Guarantors named therein and Wells Fargo, National Association, as trustee, as supplemented and amended by Supplemental Indenture No. 4 dated as of January 6, 2017.

Corporate Overview

FedEx Corp. (NYSE: FDX) provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. With annual revenue of $79 billion, the company offers integrated business solutions through operating companies competing collectively, operating collaboratively and innovating digitally under the respected FedEx brand. Consistently ranked among the world’s most admired and trusted employers, FedEx inspires its more than 570,000 team members to remain focused on safety, the highest ethical and professional standards and the needs of their customers and communities. FedEx is committed to connecting people and possibilities around the world responsibly and resourcefully, with a goal to achieve carbon-neutral operations by 2040. To learn more, please visit about.fedex.com.

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FAQ

What notes is FedEx redeeming on April 30, 2021?

FedEx is redeeming $500 million in 3.400% notes due 2022 on April 30, 2021.

How much total principal amount of notes is being redeemed by FedEx?

FedEx is redeeming approximately $3.5 billion in total outstanding notes.

When are the redemptions for the 2022-2 notes scheduled?

The €640 million in 0.700% notes due 2022 will be redeemed on May 5, 2021.

What is the impact of FedEx's note redemptions on its finances?

The redemptions are likely to improve FedEx's capital structure and reduce interest expenses.