Item 1.01 Entry into a Material Definitive Agreement.
Senior Secured Notes
On March 14, 2023, Adient Global Holdings Ltd ("Adient Global Holdings"), a
wholly-owned subsidiary of Adient plc ("Adient"), entered into an indenture (the
"Secured Indenture") relating to the issuance of $500 million aggregate
principal amount of 7.000% Senior Secured Notes (the "Secured Notes"), by and
between Adient Global Holdings and U.S. Bank Trust Company, National
Association, as trustee (the "Trustee"). Proceeds from the sale of the Secured
Notes, together with the proceeds from the sale of the Unsecured Notes (as
defined below) and cash on hand, will be used to (i) redeem $700 million of
Adient Global Holdings' 3.50% Senior Unsecured Notes due 2024 (the "2024
Unsecured Notes"), (ii) prepay $350 million of the senior secured term loan
facility of Adient US LLC ("Adient US"), a wholly-owned subsidiary of Adient
plc, maturing in 2028 (the "Term Loan Facility") and (iii) pay fees, premiums
and expenses in connection with the foregoing.
The Secured Notes mature on April 15, 2028 and bear interest at a rate of 7.000%
per annum. Interest on the Secured Notes is payable semi-annually in arrears on
April 15 and October 15 of each year, commencing on October 15, 2023.
Adient Global Holdings may redeem the Secured Notes, in whole or in part, at any
time prior to April 15, 2025, at a price equal to 100% of the principal amount
of the Secured Notes being redeemed plus accrued and unpaid interest to the
redemption date plus a "make-whole premium". Thereafter, Adient Global Holdings
may redeem the Secured Notes, in whole or in part, at established redemption
prices, plus accrued and unpaid interest. In addition, at any time prior to
April 15, 2025, Adient Global Holdings may redeem up to 40% of the aggregate
principal amount of the Secured Notes with the net cash proceeds from certain
equity offerings at a redemption price of 107% of the aggregate principal amount
thereof plus accrued and unpaid interest, if any, to, but excluding, the
redemption date. Further, at any time and from time to time during the 24-month
period following the issue date of the Secured Notes, Adient Global Holdings may
redeem up to 10% of the aggregate principal amount of the Secured Notes during
each twelve-month period commencing with the issue date of the Secured Notes at
a redemption price of 103% of the aggregate principal amount thereof plus
accrued and unpaid interest, if any, to, but excluding, the redemption date.
If Adient Global Holdings experiences a change of control (as defined in the
Secured Indenture), Adient Global Holdings must offer to repurchase the Secured
Notes at a repurchase price equal to 101% of the principal amount of the Secured
Notes to be repurchased, plus accrued and unpaid interest, if any, to the
applicable repurchase date.
The Secured Notes are senior obligations of Adient Global Holdings and rank
equally in right of payment with all of Adient Global Holdings' other existing
and future senior debt (including the Unsecured Notes), and rank senior to all
of Adient Global Holdings' existing and future indebtedness that is expressly
subordinated to the Secured Notes. In addition, the Secured Notes are jointly
and severally guaranteed by Adient and certain of Adient's subsidiaries party to
the Secured Indenture as guarantors as well as certain of Adient's subsidiaries
that executed a supplemental indenture to the Secured Indenture on March 14,
2023 (the "Supplemental Secured Indenture"). The Secured Notes and the
guarantees are secured pari passu with obligations under the Term Loan Facility
on a first-priority basis by substantially all of the tangible and intangible
assets of Adient Global Holdings and the guarantors, other than collateral
subject to a first-priority lien under Adient US's asset-based revolving credit
facility, consisting of, among other things, accounts receivable, inventory and
bank accounts (and funds on deposit therein), in which the Secured Notes and the
guarantees are secured by a second-priority security interest, in each case,
subject to certain exceptions.
--------------------------------------------------------------------------------
The Secured Indenture contains covenants that, among other things, restrict the
ability of Adient and its restricted subsidiaries to:
•incur additional indebtedness or issue disqualified stock;
•pay dividends, redeem stock or make other distributions;
•make other restricted payments or investments;
•create liens on assets;
•transfer or sell assets;
•create restrictions on payment of dividends or other amounts by restricted
subsidiaries;
•engage in mergers or consolidations;
•engage in certain transactions with affiliates; and
•designate subsidiaries as unrestricted subsidiaries.
These covenants are subject to a number of other limitations and exceptions set
forth in the Secured Indenture.
The Secured Indenture provides for customary events of default, including, but
not limited to, failure to pay principal and interest, failure to comply with
covenants, agreements or conditions, and certain events of bankruptcy or
insolvency involving Adient and its significant subsidiaries.
The description of the Secured Notes, the Secured Indenture and the Supplemental
Secured Indenture contained in this Current Report on Form 8-K ("Form 8-K") is
qualified in its entirety by reference to the complete text of the Secured
Indenture and the Supplemental Secured Indenture which are filed as Exhibits 4.1
and 4.2 hereto and are incorporated herein by reference.
Senior Unsecured Notes
On March 14, 2023, Adient Global Holdings entered into an indenture (the
"Unsecured Indenture") relating to the issuance of $500 million aggregate
principal amount of 8.250% Senior Unsecured Notes (the "Unsecured Notes"), by
and between Adient Global Holdings and U.S. Bank Trust Company, National
Association, as trustee (the "Trustee"). Proceeds from the sale of the Unsecured
Notes, together with the proceeds from the sale of the Secured Notes and cash on
hand, will be used to (i) redeem $700 million of the 2024 Unsecured Notes, (ii)
prepay $350 million of the Term Loan Facility and (iii) pay fees, premiums and
expenses in connection with the foregoing.
The Unsecured Notes mature on April 15, 2031 and bear interest at a rate of
8.250% per annum. Interest on the Unsecured Notes is payable semi-annually in
arrears on April 15 and October 15 of each year, commencing on October 15, 2023.
Adient Global Holdings may redeem the Unsecured Notes, in whole or in part, at
any time prior to April 15, 2026, at a price equal to 100% of the principal
amount of the Unsecured Notes being redeemed plus accrued and unpaid interest
to, but excluding, the redemption date plus a "make-whole premium". Thereafter,
Adient Global Holdings may redeem the Unsecured Notes, in whole or in part, at
established redemption prices, plus accrued and unpaid interest. In addition, at
any time prior to April 15, 2026, Adient Global Holdings may redeem up to 40% of
the aggregate principal amount of the Unsecured Notes with the net cash proceeds
from certain equity offerings at a redemption price of 108.25% of the aggregate
principal amount thereof plus accrued and unpaid interest, if any, to, but
excluding, the redemption date.
If Adient Global Holdings experiences a change of control (as defined in the
Unsecured Indenture), Adient Global Holdings must offer to repurchase the
Unsecured Notes at a repurchase price equal to
--------------------------------------------------------------------------------
101% of the principal amount of the Unsecured Notes to be repurchased, plus
accrued and unpaid interest, if any, to the applicable repurchase date.
The Unsecured Notes are senior obligations of Adient Global Holdings and rank
equally in right of payment with all of Adient Global Holdings' other existing
and future senior debt (including the Secured Notes) and rank senior to all of
Adient Global Holdings' existing and future indebtedness that is expressly
subordinated to the unsecured notes. In addition, the Unsecured Notes will be
jointly and severally guaranteed by each of the guarantors on a pari passu
unsecured basis with the guarantees of the Secured Notes, pursuant to the terms
of the Unsecured Indenture and a supplemental indenture to the Unsecured
Indenture, dated March 14, 2023 (the "Supplemental Unsecured Indenture").
The Unsecured Indenture contains covenants that, among other things, restrict
the ability of Adient and its restricted subsidiaries to:
•incur additional indebtedness or issue disqualified stock;
•pay dividends, redeem stock or make other distributions;
•make other restricted payments or investments;
•create liens on assets;
•transfer or sell assets;
•create restrictions on payment of dividends or other amounts by restricted
subsidiaries;
•engage in mergers or consolidations;
•engage in certain transactions with affiliates; and
•designate subsidiaries as unrestricted subsidiaries.
These covenants are subject to a number of other limitations and exceptions set
forth in the Unsecured Indenture.
The Unsecured Indenture provides for customary events of default, including, but
not limited to, failure to pay principal and interest, failure to comply with
covenants, agreements or conditions, and certain events of bankruptcy or
insolvency involving Adient and its significant subsidiaries.
The description of the Unsecured Notes, the Unsecured Indenture and the
Supplemental Unsecured Indenture contained in this Form 8-K is qualified in its
entirety by reference to the complete text of the Unsecured Indenture and the
Supplemental Unsecured Indenture which are filed as Exhibits 4.3 and 4.4 hereto
and are incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 is incorporated into this Item 2.03 by
reference.
© Edgar Online, source Glimpses