Item 1.02 Termination of a Material Definitive Agreement
In connection with the Tender Offer, on September 22, 2021, Opal Spanish
Holdings, S.A.U. ("OSH") entered into a CNMV Guarantees Issuance Agreement (as
amended, modified or supplemented, the "Guarantees Issuance Agreement"), with
the CNMV guarantee providers from time to time party thereto and Morgan Stanley
Senior Funding, Inc. as administrative agent. Pursuant to the Guarantees
Issuance Agreement, the CNMV guarantee providers committed to issue to the CNMV
guarantees ("Avales") in an amount equal to the total purchase price of the
Tender Offer, which was originally €1.65 billion, as required by the Spanish
takeover code. In connection therewith, on September 22, 2021, Otis entered into
a Company Guarantee Agreement with Morgan Stanley Senior Funding, Inc., as
administrative agent, pursuant to which Otis agreed to guarantee the payment
obligations of OSH under the Guarantees Issuance Agreement.
Also in connection with the Tender Offer, on September 22, 2021, Otis entered
into a Bridge Loan Credit Agreement (as amended, modified or supplemented, the
"Bridge Credit Agreement"), as guarantor, with OSH, as borrower, the lenders
from time to time party thereto and Morgan Stanley Senior Funding, Inc. as
administrative agent. The Bridge Credit Agreement provided OSH with a €1.65
billion term loan facility.
On November 12, 2021, the net proceeds from the offering of Notes (as defined
and discussed below) were, together with cash on hand, placed in a segregated
account of OSH. In connection therewith and in compliance with the Spanish
takeover code, on November 12, 2021, OSH terminated the Avales issued to the
CNMV pursuant to the CNMV Guarantees Agreement and Otis and OSH voluntarily
terminated the commitments outstanding under the Bridge Credit Agreement and the
Guarantees Issuance Agreement, respectively.
The Guarantees Issuance Agreement, Company Guarantee Agreement and Bridge Credit
Agreement were filed on Otis' Current Report on Form 8-K with the SEC on
September 23, 2021.
Several of the lenders and the CNMV guarantee providers under the Bridge Credit
Agreement and the Guarantees Issuance Agreement, respectively, and their
respective affiliates have various relationships with Otis and its subsidiaries
involving the provision of financial services, including investment banking,
commercial banking and advisory for which they receive customary fees and may do
so in the future.
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Item 8.01. Other Events.
On November 12, 2021, Highland Holdings S.à.r.l., a private limited liability
company (société à responsabilité limitée) incorporated and existing under the
laws of Grand Duchy of Luxembourg, having its registered office at 6, rue Jean
Monnet, L-2180 Luxembourg, and registered with Luxembourg Trade and Companies
Register (Registre de Commerce et des Sociétés, Luxembourg) under number B237108
("Highland"), an indirect wholly-owned subsidiary of Otis, issued €500,000,000
aggregate principal amount of 0.000% Notes due 2023 (the "2023 Notes"),
€600,000,000 aggregate principal amount of 0.318% Notes due 2026 (the "2026
Notes") and €500,000,000 aggregate principal amount of 0.934% Notes due 2031
(the "2031 Notes" and, together with the 2023 Notes and the 2026 Notes, the
"Notes"). Each series of Notes are fully and unconditionally guaranteed on an
unsecured, unsubordinated basis by Otis (Otis' guarantee of each such series, a
"Parent Guarantee" and, collectively, the "Parent Guarantees").
The Notes were registered under the Securities Act of 1933, as amended (the
"Act"), pursuant to the Registration Statement that on Form S-3ASR (File No.
333-240269), as amended on October 26, 2021 by Post-Effective Amendment No. 1
filed by Otis and Highland. On November 5, 2021, Otis and Highland filed with
the SEC a Prospectus Supplement dated as of November 4, 2021 (the "Prospectus
Supplement") containing the final terms of the Notes pursuant to Rule 424(b)(2)
of the Act.
In connection with the offer and sale of the Notes, Otis and Highland entered
into an Underwriting Agreement, dated as of November 4, 2021 (the "Underwriting
Agreement"), with Morgan Stanley & Co. International plc, HSBC Continental
Europe and JP Morgan AG, as representatives of the underwriters named in
Schedule A thereto (the "Underwriters") and the other Underwriters party
thereto. A copy of the Underwriting Agreement has been filed as exhibit 1.1 to
the Form 8-K filed on November 5, 2021. The Notes were issued under the
Indenture, dated as of November 12, 2021 (the "Base Indenture"), as supplemented
by the Supplemental Indenture No. 1, dated as of November 12, 2021 (the
"Supplemental Indenture" and, the Base Indenture as supplemented by the
Supplemental Indenture, the "Indenture"), in each case among Otis, Highland and
The Bank of New York Mellon Trust Company, N.A., as trustee. The Base Indenture
and the Supplemental Indenture have been filed as exhibits 4.1 and 4.2 to this
Current Report and are incorporated herein by reference. The form of the 2023
Notes, the form of the 2026 Notes and the form of the 2031 Notes have been filed
as exhibits 4.3, 4.4 and 4.5 to this Current Report and are incorporated herein
by reference.
The net proceeds to Highland from the sale of the Notes, after the Underwriter's
discount and offering expenses, are estimated to be approximately €1.6 billion,
or $1.8 billion, based on the euro/U.S. dollar rate of exchange as of October
29, 2021. Otis intends to use the net proceeds of the offering of the Notes to
purchase shares of Zardoya, whether pursuant to the Tender Offer or otherwise,
and to pay fees and expenses in connection therewith.
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The 2023 Notes bear interest at the rate of 0.000% per annum and mature on
November 12, 2023. The 2026 Notes bear interest at a rate of 0.318% per annum
and mature on December 15, 2026. The 2031 Notes bear interest at a rate of
0.934% per annum and mature on December 15, 2031. Interest on the 2023 Notes
will be payable on November 12 of each year, beginning on November 12, 2022.
Interest on the 2026 Notes and the 2031 Notes will be payable on December 15 of
each year, beginning on December 15, 2022. Highland may redeem any series of
Notes, in whole or in part, at any time at the applicable redemption price
described in the Prospectus Supplement. In addition, each series of Notes may be
redeemed in whole, but not in part, at any time at Highland's option in the
event of certain developments affecting tax laws of the Grand Duchy of
Luxembourg, the United States or another relevant taxing jurisdiction, as
described in the Prospectus Supplement.
Upon the occurrence of a Change of Control Triggering Event (as defined in the
Base Indenture), unless Highland has exercised its right to redeem the Notes by
giving irrevocable notice on or prior to the 30th day after the Change of
Control Triggering Event in accordance with the Indenture, each holder of the
Notes will have the right to require Highland to purchase all or a portion of
such holder's Notes pursuant to an offer as described in the Prospectus
Supplement at a purchase price equal to 101% of the principal amount thereof
plus accrued and unpaid interest, if any, thereon to, but excluding, the Change
of Control Payment Date (as defined in the Base Indenture).
The Notes and the Parent Guarantees are unsecured, unsubordinated obligations of
Highland and Otis, respectively, and rank equally in right of payment with all
of Highland's and Otis' respective existing and future unsecured, unsubordinated
indebtedness. The Notes were issued in minimum denominations of €100,000 and any
integral multiple of €1,000 in excess thereof.
For the relevant terms and conditions of the Underwriting Agreement, the
Indenture and the Notes, please refer to the Prospectus Supplement. The
descriptions of the Underwriting Agreement, the Indenture and the Notes herein
and in the Prospectus Supplement are summaries and are qualified in their
entirety by the terms of the Underwriting Agreement, the Indenture and the
Notes, respectively.
This report is not intended to and does not constitute an offer to sell or the
solicitation of an offer to subscribe for or buy or an invitation to purchase or
subscribe for any securities or the solicitation of any vote in any
jurisdiction, nor shall there be any sale, issuance or transfer of securities in
any jurisdiction in contravention of applicable law. No offer of securities
shall be made except by means of a prospectus meeting the requirements of
Section 10 of the Act.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Exhibit Description
4.1 Indenture, dated as of November 12, 2021, among Otis Worldwide Corporation,
Highland Holdings S.à r.l. and The Bank of New York Mellon Trust Company,
N.A., as trustee.
4.2 Supplemental Indenture No. 1, dated as of November 12, 2021, among Otis
Worldwide Corporation, Highland Holdings S.à r.l and The Bank of New York
Mellon Trust Company, N.A., as trustee.
4.3 Form of 0.000% Note due 2023 (included in Exhibit 4.2 hereto).
4.4 Form of 0.318% Note due 2026 (included in Exhibit 4.2 hereto).
4.5 Form of 0.934% Note due 2031 (included in Exhibit 4.2 hereto).
5.1 Opinion of Wachtell, Lipton, Rosen & Katz.
5.2 Opinion of NautaDutilh Avocats Luxembourg S.à r.l.
23.1 Consent of Wachtell, Lipton, Rosen & Katz (included in Exhibit 5.1).
23.2 Consent of NautaDutilh Avocats Luxembourg S.à r.l (included in Exhibit
5.2).
104 Cover Page Interactive Data File - the cover page XBRL tags are embedded
within the Inline XBRL document.
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