Item 1.01 Entry into a Material Definitive Agreement.
Bond Offering
On
The Notes offered in the Offering will not be registered under the Securities
Act of 1933, as amended, and may not and will not be offered or sold in
Certain terms and conditions of the Notes are as follows:
Maturity. The Notes mature on
Interest. The Notes accrue interest at a rate of 5.50% per year. Interest on the
Notes is paid semi-annually on each
Issue Price. The issue price of the Notes is 100.00% of par.
Guarantees. The Notes are unconditionally, jointly and severally guaranteed, on
a senior unsecured basis, by
Ranking. The Notes and the guarantees are senior unsecured obligations of the Company and the guarantors and rank equally in right of payment with all of the Company's and the guarantors' existing and future senior indebtedness and rank senior in right of payment to all of the Company's and the guarantors' future indebtedness that expressly provides for its subordination to the Notes and the guarantees. However, the Notes are effectively junior to any of the Company's secured indebtedness, including all indebtedness under the Company's secured credit facilities, to the extent of the value of the assets securing such indebtedness. In addition, the Notes are structurally subordinated to all indebtedness and other liabilities of the Company's subsidiaries that do not guarantee the Notes.
Optional Redemption. On or after
Change of Control. If a change of control occurs, each holder of Notes may require the Company to repurchase all or a portion of its Notes for cash at a price equal to 101% of the aggregate principal amount of such Notes, plus any accrued and unpaid interest to the date of repurchase.
Certain Covenants. The 2030 Indenture governing the Notes contains covenants limiting, among other things, the ability of the Company and its direct and indirect restricted subsidiaries to incur additional indebtedness; create liens; engage in sale-leaseback transactions; pay dividends or make distributions in respect of capital stock; purchase or redeem capital stock; make investments or certain other restricted payments; sell assets; issue or sell stock of restricted subsidiaries; enter into transactions with affiliates; or effect a consolidation or merger. These covenants are subject to a number of important exceptions and qualifications.
2
Events of Default. The 2030 Indenture contains customary events of default which
could, subject to certain conditions, cause the Notes to become immediately due
and payable, including, but not limited to, the failure to make premium or
interest payments; failure by the Company to accept and pay for Notes tendered
when and as required by the change of control and asset sale provisions of the
2030 Indenture; failure to comply with the merger covenant in the 2030
Indenture; failure to comply with certain agreements in the 2030 Indenture
following notice by the Trustee or the holders of at least 25% in aggregate
principal amount of the Notes then outstanding; a default under any mortgage,
indenture or instrument caused by a failure to pay any indebtedness at final
maturity after the expiration of any applicable grace period or that results in
the acceleration of any indebtedness prior to its express maturity, if the
amount of such indebtedness aggregates
This summary does not purport to be complete and is qualified in its entirety by reference to the form of the Notes and the 2030 Indenture, which are filed as Exhibit 4.1 hereto and are incorporated herein by reference. Interested parties should read these documents in their entirety.
Amended and Restated Credit Agreement
On
The Credit Agreement refinances the Company's previously existing credit
facility and includes certain modified terms from the previously existing
revolving credit facility, including extending the maturity to
The material terms of the Credit Agreement are described below.
Facility under the Credit Agreement
The facility (the "Revolving Facility") under the Credit Agreement consists of a
The aggregate commitment amount with respect to (a) the
Interest Rate
All outstanding amounts under the
The multi-currency tranche (if funded in Euros) will bear interest, at the option of the Company, at a rate per annum equal to the LIBO Rate, adjusted for statutory reserves, plus a margin ranging between 1.75% to 2.75% per annum. The multi-currency tranche (if funded in Canadian dollars) will bear interest, at the Company's option, at a rate per annum equal to (x) the BA Rate (as defined in the Credit Agreement), plus a margin ranging between 1.75% to 2.75% per annum or (y) the Canadian Base Rate (as defined in the Credit Agreement), plus a margin ranging between 0.75% to 1.75% per annum.
The margin in each of the foregoing is determined based on certain total net leverage ratios specified in the Credit Agreement.
Prepayment Provisions
The Credit Agreement does not contain any mandatory prepayment provisions with respect to the Revolving Facility, except in the event that the overall exposure exceeds the commitments under the Revolving Facility.
3
Voluntary prepayments of borrowings under the Credit Agreement are permitted at any time, in agreed-upon minimum principal amounts. Prepayments are not subject to premium or penalty (except customary LIBOR breakage costs, if applicable).
Guarantees and Security
Obligations under the Credit Agreement and, at the Company's option, under
certain interest rate protection or other hedging arrangements and certain cash
management arrangements (collectively, the "Secured Obligations") are guaranteed
by
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information contained in Item 1.01 above is hereby incorporated by reference into this Item 2.03.
Forward-Looking Statements
We have made, implied or incorporated by reference certain forward-looking
statements in this current report on Form 8-
Because these forward-looking statements are based upon our current expectations of future events and projections and are subject to a number of risks and uncertainties, many of which are beyond our control and some of which may change rapidly, actual results or outcomes may differ materially from those expressed or implied herein, and you should not place undue reliance on these statements. Important factors that could cause our actual results to differ materially from those expressed or implied herein include, without limitation: (1) the impact of the COVID-19 pandemic on our customers, employees, manufacturing facilities, suppliers, the capital markets and our financial condition, and results of operations, all of which tend to aggravate the other risks and uncertainties we face; (2) the impact of our indebtedness on our business, financial condition and results of operations; (3) the impact of restrictions in our debt instruments on our ability to operate our business, finance our capital needs or pursue or expand business strategies; (4) any failure to comply with financial covenants and other provisions and restrictions of our debt instruments; (5) the effects of general economic conditions, including the impact of, and changes to tariffs and trade policies, inflation, recession or fears of a recession, depression or fears of a depression, labor costs and stock market volatility or monetary or fiscal policies in the countries where we do
4
business; (6) the impact of fluctuations in commodity prices, costs or
availability of raw materials or terms and conditions available from suppliers,
including suppliers' willingness to advance credit; (7) interest rate and
exchange rate fluctuations; (8) the loss of, significant reduction in, or
dependence upon, sales to any significant retail customer(s); (9) competitive
promotional activity or spending by competitors, or price reductions by
competitors; (10) the introduction of new product features or technological
developments by competitors and/or the development of new competitors or
competitive brands; (11) the impact of actions taken by significant
stockholders; (12) changes in consumer spending preferences and demand for our
products, particularly in light of the COVID-19 pandemic and economic stress;
(13) our ability to develop and successfully introduce new products, protect our
intellectual property and avoid infringing the intellectual property of third
parties; (14) our ability to successfully identify, implement, achieve and
sustain productivity improvements (including our Global Productivity Improvement
Plan), cost efficiencies (including at our manufacturing and distribution
operations) and cost savings; (15) the seasonal nature of sales of certain of
our products; (16) the effects of climate change and unusual weather activity,
as well as further natural disasters and pandemics; (17) the cost and effect of
unanticipated legal, tax or regulatory proceedings or new laws or regulations
(including environmental, public health and consumer protection regulations);
(18) our discretion to conduct, suspend or discontinue our share repurchase
program (including our discretion to conduct purchases, if any, in a variety of
manners including open-market purchases or privately negotiated transactions);
(19) public perception regarding the safety of products that we manufacture and
sell, including the potential for environmental liabilities, product liability
claims, litigation and other claims related to products manufactured by us and
third parties; (20) the impact of existing, pending or threatened litigation,
government regulations or other requirements or operating standards applicable
to our business; (21) the impact of cybersecurity breaches or our actual or
perceived failure to protect company and personal data; (22) changes in
accounting policies applicable to our business; (23) our ability to utilize net
operating loss carry-forwards to offset tax liabilities from future taxable
income; (24) the impact of expenses resulting from the implementation of new
business strategies, divestitures or current and proposed restructuring
activities; (25) our ability to successfully implement further acquisitions or
dispositions and the impact of any such transactions on our financial
performance; (26) the unanticipated loss of key members of senior management and
the transition of new members of our management teams to their new roles; (27)
the impact of economic, social and political conditions or civil unrest in the
Some of the above-mentioned factors are described in further detail in the
sections entitled "Risk Factors" in our annual and quarterly reports, as
applicable. You should assume the information appearing in this current report
on Form 8-K is accurate only as of the date hereof, or as otherwise specified,
as our business, financial condition, results of operations and prospects may
have changed since such date. Except as required by applicable law, including
the securities laws of
5
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are being filed with this Current Report on Form 8-K.
Exhibit No. Description 4.1 Indenture governing the Notes, dated as ofJune 30, 2020 , amongSpectrum Brands, Inc. , the guarantors party thereto andUS Bank National Association , as trustee. 10.1 Amended and Restated Credit Agreement, dated as ofJune 30, 2020 among the Company,SB/RH Holdings , the guarantors party thereto, the lenders party thereto from time to time, and Royal Bank of Canada, as the administrative agent. 10.2 Security Agreement, dated as ofJune 23, 2015 , by and among the Company,SB/RH Holdings , the subsidiary guarantors party thereto from time to time and Deutsche Bank AG New York Branch, as collateral agent (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with theSEC bySpectrum Brands Legacy, Inc. (f.k.a.Spectrum Brands Holdings, Inc. ) onJune 23, 2015 (File No. 001-34757)). 10.3 Loan Guaranty, dated as ofJune 23, 2015 , by and amongSB/RH Holdings , the subsidiary guarantors party thereto from time to time and Deutsche Bank AG New York Branch, as administrative agent and collateral agent (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with theSEC bySpectrum Brands Legacy, Inc. (f.k.a.Spectrum Brands Holdings, Inc. ) onJune 23, 2015 (File No. 001-34757)).
© Edgar Online, source