$690 Million 2020 Mandatory Exchangeable Trust Securities Offering
5/12/2020

Davis Polk advised the representative of the several initial purchasers in connection with a Rule 144A offering by 2020 Mandatory Exchangeable Trust (the “Trust”) of 690,000 2020 mandatory exchangeable trust securities exchangeable into Class A common stock, par value $0.01 per share, of Chewy, Inc. The securities include 90,000 securities sold pursuant to the full exercise of the initial purchasers’ option to purchase additional securities. The offering raised gross proceeds of $690 million. The Class A common stock is listed on the New York Stock Exchange under the symbol “CHWY.”

At the closing of the transaction, the Trust entered into a variable prepaid forward agreement on the Class A common stock of Chewy with Buddy Chester Sub LLC (the “Seller”), a wholly owned subsidiary of PetSmart, Inc. Pursuant to the variable prepaid forward agreement, the Trust paid to the Seller the net proceeds received from the issuance of the securities, excluding amounts in respect of the Trust's expenses and amounts used by the Trust to purchase U.S. Treasury securities, which will fund quarterly distributions on the securities.

Chewy is the largest pure-play pet online retailer in the United States. Its mission is to be the most trusted and convenient online destination for pet parents everywhere. Chewy partners with more than 2,000 of the best and most trusted brands in the pet industry to bring a high-bar, customer-centric experience to its customers. Chewy is headquartered in Dania Beach, Florida.

The Davis Polk equity derivatives team included partners John M. Brandow and Mark M. Mendez and associates Hanbing Zhang and Danielle Forni. The capital markets team included partners Michael Kaplan and Marcel Fausten and associates Angela Park and Justin Levine. Partner Gregory S. Rowland provided 1940 act advice and partner Lucy W. Farr provided tax advice. All members of the Davis Polk team are based in the New York office.