PetSmart Announces 2020 Mandatory Exchangeable Trust Securities Offering

PetSmart announced an intention of the 2020 Mandatory Exchangeable Trust, a Delaware statutory trust, to offer, subject to market conditions and other factors, $600 million aggregate purchase price of its 2020 Mandatory Exchangeable Trust Securities exchangeable into Class A common stock, par value $0.01 per share, of Chewy, Inc. in a private placement to investors that are both qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, and qualified purchasers as defined in Section 2(a)(51) of  the Investment Company Act of 1940, as amended, and the rules thereunder for purposes of Section 3(c)(7) of the Investment Company Act.

The Trust expects to grant the initial purchasers of the Trust Securities an option to purchase up to an additional $90 million aggregate purchase price of its Trust Securities. The Trust will enter into a variable forward purchase agreement with Buddy Chester Sub, a wholly owned subsidiary of PetSmart. At the closing of the offering of the Trust Securities, the Trust will pay to the Seller the net proceeds received from the issuance of the Trust Securities, excluding amounts in respect of the Trust’s expenses and amounts used by the Trust to purchase US Treasury securities, which will fund quarterly distributions on the Trust Securities. PetSmart intends to use the net proceeds received under the variable forward purchase agreement to repay outstanding debt. At the exchange date, which is expected to be May 16, 2023, the Trust will exchange each Trust Security for a certain number of shares of common stock (determined by reference to the trading price of the common stock at that time) or, subject to the Seller’s election, cash or a combination of cash and common stock. Under certain circumstances, the Trust Securities may be exchanged prior to the scheduled exchange date.

The Trust Securities are only being offered to persons reasonably believed to be both qualified institutional buyers as defined in Rule 144A under the Securities Act and qualified purchasers as defined in Section 2(a)(51) of the Investment Company Act for purposes of Section 3(c)(7) of the Investment Company Act. Neither the Trust, Trust Securities nor any of the common stock subject to the Trust Securities have been or will be registered under the Investment Company Act, the Securities Act or the securities laws of any other state or jurisdiction, and therefore, may not be offered or sold in the United States without registration or an applicable exemption from registration requirements under the Investment Company Act, the Securities Act and any applicable state or other jurisdiction’s securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful.