Item 1.01 Entry into a Material Definitive Agreement.
On September 24, 2020, Brown & Brown, Inc. (the "Company") completed the
issuance and sale of $700,000,000 aggregate principal amount of the Company's
2.375% Senior Notes due 2031 (the "Notes"). The net proceeds to the Company from
the sale of the Notes, after deducting underwriting discounts and expenses, were
approximately $693.3 million.
The Notes were offered and sold under the Company's Automatic Shelf Registration
Statement on Form S-3 (Registration No. 333-248587) filed with the Securities
and Exchange Commission (the "SEC") on September 3, 2020 (the "Registration
Statement"). In connection with the issuance and sale of the Notes, the Company
entered into an Underwriting Agreement, dated as of September 17, 2020, with
J.P. Morgan Securities LLC, BofA Securities, Inc., PNC Capital Markets LLC and
Truist Securities, Inc., as representatives of the several underwriters named
therein, which was filed as an exhibit to the Company's Current Report on Form
8-K filed with the SEC on September 18, 2020.
The Notes were issued pursuant to that certain Indenture, dated as of September
18, 2014, between the Company and U.S. Bank National Association, as trustee
(the "Base Indenture"), as supplemented by the Third Supplemental Indenture,
dated September 24, 2020 (the "Supplemental Indenture," and together with the
Base Indenture, the "Indenture"). The Supplemental Indenture is filed as Exhibit
4.2 to this Current Report on Form 8-K and is incorporated by reference herein.
Information concerning the Notes and related matters is set forth in the
Registration Statement, including the Company's Prospectus and Prospectus
Supplement, which Prospectus Supplement was filed with the SEC on September 21,
2020.
The Notes bear interest at the rate of 2.375% per year and will mature on March
15, 2031. Interest on the Notes will be payable semi-annually in arrears on
March 15 and September 15 of each year, commencing on March 15, 2021. The Notes
are senior unsecured obligations of the Company and will rank equal in right of
payment to all of the Company's existing and future senior unsecured
indebtedness. The Company may redeem the Notes at any time in whole or, from
time to time, in part at the "make whole" redemption price specified in the
Prospectus Supplement for the Notes being redeemed, plus accrued and unpaid
interest thereon to but excluding the redemption date. The form of note for the
Notes is filed as Exhibit 4.3 to this Current Report on Form 8-K and is
incorporated by reference herein. The Company will use the net proceeds of the
offering of the Notes to repay a portion of the outstanding borrowings under the
Company's credit facility and for general corporate purposes.
The Indenture includes certain restrictive covenants, including covenants that
limit the ability of the Company and certain of its subsidiaries to, among other
things, incur certain secured debt and consolidate, merge, or transfer
substantially all of the Company's assets to another entity. The covenants are
subject to a number of important exceptions and qualifications set forth in the
Indenture. The Indenture also contains a covenant regarding the repurchase by
the Company of the Notes upon a "change of control triggering event."
The foregoing description of the Indenture and the Notes is qualified in its
entirety by their respective terms. The Base Indenture, the Supplemental
Indenture and the Notes are filed as exhibits to this Current Report on Form 8-K
and are incorporated by reference herein.
In connection with the issuance of the Notes, Holland & Knight LLP, counsel to
the Company, delivered an opinion to the Company, dated September 24, 2020,
regarding the legality of the Notes upon issuance and sale thereof. A copy of
the opinion is filed as Exhibit 5.1 to this Current Report on Form 8-K and is
incorporated by reference into the Registration Statement.
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 in Item 1.01 of this Current Report on Form 8-K is
incorporated by reference into this Item 2.03.
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