Item 1.01. Entry into a Material Definitive Agreement.
Convertible Notes and the Indenture
On March 2, 2021, Ceridian HCM Holding Inc. (the "Company") priced its private
offering of $500.0 million in aggregate principal amount of 0.25% Convertible
Senior Notes due March 15, 2026 (the "Notes"). The Notes were issued pursuant to
an indenture, dated March 5, 2021 (the "Indenture"), between the Company and
Wells Fargo Bank, National Association, as trustee (the "Trustee"). The
Indenture includes customary covenants and sets forth certain events of default
after which the Notes may be declared immediately due and payable and sets forth
certain types of bankruptcy or insolvency events of default involving the
Company after which the Notes become automatically due and payable. Pursuant to
the Purchase Agreement (as defined below), the Company also granted the Initial
Purchasers (as defined below) of the Notes a 13-day option to purchase up to an
additional $75.0 million aggregate principal amount of the Notes (the
"Additional Notes").
The Notes bear interest at a coupon rate of 0.25% per annum and the Company will
pay interest semi-annually in arrears on March 15 and September 15 of each year,
beginning on September 15, 2021. The Notes will mature on March 15, 2026, unless
earlier converted, redeemed, or repurchased. The Company may not redeem the
Notes prior to March 20, 2024. The Company may redeem for cash all or any
portion of the Notes (subject to the partial redemption limitation (as defined
in the Indenture)), at its option, on or after March 20, 2024 and on or before
the 30th scheduled trading day immediately before the maturity date, but only if
the last reported sale price per share of the Company's common stock, par value
$0.01 (the "Common Stock") exceeds 130% of the conversion price on (1) at least
20 trading days (whether or not consecutive) during the 30 consecutive trading
days ending on, and including, the trading day immediately before the date on
which the Company provides notice of redemption and (2) the trading day
immediately before the date the Company sends such notice, at a cash redemption
price equal to the principal amount of the Notes to be redeemed, plus any
accrued and unpaid interest, if any, to, but excluding, the redemption date. No
sinking fund is provided for the Notes, which means that the Company is not
required to redeem or retire the Notes periodically. Holders of the Notes will
have the right to require the Company to repurchase for cash all or a portion of
their Notes upon the occurrence of a fundamental change (as defined in the
Indenture) at a purchase price of 100% of their principal amount plus any
accrued and unpaid interest.
The Notes will be convertible at the option of the holders only in the following
circumstances: (1) during any calendar quarter commencing after the calendar
quarter ending on June 30, 2021, if the last reported sale price per share of
Common Stock exceeds 130% of the conversion price for each of at least 20
trading days during the 30 consecutive trading days ending on, and including,
the last trading day of the immediately preceding calendar quarter; (2) during
the five consecutive business days immediately after any ten consecutive trading
day period (such ten consecutive trading day period, the "measurement period")
in which the trading price per $1,000 principal amount of notes for each trading
day of the measurement period was less than 98% of the product of the last
reported sale price per share of Common Stock on such trading day and the
conversion rate on such trading day; (3) upon the occurrence of certain
corporate events or distributions on Common Stock, as described in the
Indenture; (4) if the Company calls such Notes for redemption; and (5) at any
time from, and including, September 15, 2025 until the close of business on the
second scheduled trading day immediately before the maturity date. Upon
conversion, the Company may satisfy its conversion obligation by paying or
delivering, as applicable, cash, shares of Common Stock or a combination of cash
and shares of Common Stock, at the Company's election, in the manner and subject
to the terms and conditions provided in the Indenture.
The conversion rate for the Notes will initially be 7.5641 shares of Common
Stock per $1,000 principal amount of Notes, which is equivalent to an initial
conversion price of approximately $132.20 per share of Common Stock on the New
York Stock Exchange ("NYSE"). The initial conversion price of the Notes
represents a premium of approximately 47.5% over the last reported sale price of
Common Stock on March 2, 2021, which was $89.63 per share as reported on the
NYSE. The sale price of Common Stock on March 2, 2021 was C$113.21 per share as
reported on the Toronto Stock Exchange. The conversion rate is subject to
customary adjustments under certain circumstances in accordance with the terms
of the Indenture. In addition, if certain corporate events that constitute a
"Make-Whole Fundamental Change" (as defined in the Indenture) occur, then the
conversion rate will, in certain circumstances, be increased for a specified
period of time.
Upon the occurrence of a fundamental change (as defined in the Indenture),
subject to certain conditions, holders may require the Company to repurchase all
of the Notes at a cash repurchase price equal to the principal amount of the
Notes to be repurchased, plus any accrued and unpaid interest, if any, to, but
excluding, the fundamental change repurchase date.
The Notes are the Company's senior unsecured obligations and will be equal in
right of payment with the Company's existing and future senior, unsecured
indebtedness; senior in right of payment to the Company's existing and future
indebtedness that is expressly subordinated to the Notes; effectively
. . .
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 of this Current Report
on Form 8-K is incorporated herein by reference.
Item 3.02. Unregistered Sales of Equity Securities.
The information set forth under Items 1.01 and 8.01 of this Current Report
on Form 8-K is incorporated herein by reference.
The Company offered and sold the Notes to the Initial Purchasers in reliance on
the exemption from the registration requirements provided by Section 4(a)(2) of
the Securities Act of 1933, as amended (the "Securities Act") and pursuant to
exemptions from the prospectus requirements of applicable Canadian securities
laws, and for resale by the Initial Purchasers to (a) persons in the United
States reasonably believed to be "qualified institutional buyers," as defined in
and pursuant to the exemption from registration requirements provided by Rule
144A under the Securities Act, and (b) persons resident or located in Canada in
accordance with applicable Canadian securities laws, which vary depending on the
province and which may require resales to be made in accordance with prospectus
and registration requirements or pursuant to available statutory exemptions or a
discretionary exemption from the prospectus and registration requirements
granted by the applicable Canadian securities regulatory authorities. The
Company relied on these exemptions from registration based in part on
representations made by the Initial Purchasers in the Purchase Agreement
pursuant to which the Company sold the Notes to the Initial Purchasers. The
shares of Common Stock issuable upon conversion of the Notes, if any, have not
been (x) registered under the Securities Act and may not be offered or sold in
the United States absent registration or an applicable exemption from the
registration requirements or (y) qualified for distribution by way of a
prospectus in any province or territory of Canada and unless so qualified, may
not be offered or sold to persons located or resident in Canada except pursuant
to an exemption from the prospectus requirements of applicable Canadian
securities laws.
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To the extent that any shares of Common Stock are issued upon conversion of the
Notes, they will be issued in transactions anticipated to be exempt from
registration under the Securities Act by virtue of Section 3(a)(9) thereof,
because no commission or other remuneration is expected to be paid in connection
with conversion of the Notes and any resulting issuance of shares of Common
Stock.
Item 8.01. Other Events
Purchase Agreement
On March 2, 2021, the Company entered into a purchase agreement (the "Purchase
Agreement") with Goldman Sachs & Co LLC and J.P. Morgan Securities LLC, as
representatives of the several initial purchasers named therein (collectively,
the "Initial Purchasers"), to issue and sell the Notes. In addition, pursuant to
the terms of the Purchase Agreement, the Company granted the Initial
Purchasers a 13-day option to purchase Additional Notes on the same terms and
conditions. The offering closed on March 5, 2021.
The Purchase Agreement contains customary representations, warranties, and
covenants by the Company and other terms and conditions customary in agreements
of this type. Under the terms of the Purchase Agreement, the Company has agreed
to indemnify the Initial Purchasers against certain liabilities.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description of Exhibit
4.1 Indenture, dated as of March 5, 2021, between Ceridian HCM Holding
Inc. and Wells Fargo Bank, National Association.
4.2 Form of 0.25% Convertible Senior Notes due 2026 (included in Exhibit
4.1).
10.1 Form of Capped Call Transaction Confirmation.
104 Cover Page Interactive Data File (the cover page XBRL tags are
embedded within the inline XBRL document).
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