Item 1.01 Entry into a Material Definitive Agreement.
On September 23, 2021 (the "Closing Date"), Quanta Services, Inc. (the
"Company") issued $500,000,000 aggregate principal amount of its 0.950% Senior
Notes due 2024 (the "2024 Notes"), $500,000,000 aggregate principal amount of
its 2.350% Senior Notes due 2032 (the "2032 Notes") and $500,000,000 aggregate
principal amount of its 3.050% Senior Notes due 2041 (the "2041 Notes" and,
together with the 2024 Notes and the 2032 Notes, the "Notes"). The Notes were
sold pursuant to an underwriting agreement, dated as of September 9, 2021 (the
"Underwriting Agreement"), by and among the Company and BofA Securities, Inc.
and Wells Fargo Securities, LLC, as representatives of the several underwriters
named in Schedule A to the Underwriting Agreement, as previously reported on the
Company's Current Report on Form 8-K filed on September 10, 2021.
The 2024 Notes were issued under the indenture, dated as of September 22, 2020
(the "Base Indenture"), as supplemented and amended by the second supplemental
indenture, dated as of September 23, 2021 (the "Second Supplemental Indenture"),
the 2032 Notes were issued under the Base Indenture as supplemented and amended
by the third supplemental indenture, dated as of September 23, 2021 (the "Third
Supplemental Indenture"), and the 2041 Notes were issued under the Base
Indenture as supplemented and amended by the fourth supplemental indenture,
dated as of September 23, 2021 (the "Fourth Supplemental Indenture", and
together with the Base Indenture, Second Supplemental Indenture and Third
Supplemental Indenture, the "Indenture"), in each case, between the Company, as
issuer, and U.S. Bank National Association, as trustee (the "Trustee"). Interest
on the 2024 Notes will accrue at a rate of 0.950% per annum and is payable
semi-annually, in arrears, on April 1 and October 1 of each year, commencing
April 1, 2022. The 2024 Notes will mature on October 1, 2024, unless earlier
redeemed. Interest on the 2032 Notes will accrue at a rate of 2.350% per annum
and is payable semi-annually, in arrears, on January 15 and July 15 of each
year, commencing July 15, 2022. The 2032 Notes will mature on January 15, 2032,
unless earlier redeemed. Interest on the 2041 Notes will accrue at a rate of
3.050% per annum and is payable semi-annually, in arrears, on April 1 and
October 1 of each year, commencing April 1, 2022. The 2041 Notes will mature on
October 1, 2041, unless earlier redeemed.
The Notes are the Company's senior unsecured obligations and rank equally in
right of payment with the Company's existing and future senior unsecured
indebtedness. The Notes are effectively junior to the Company's existing and
future secured indebtedness to the extent of the value of the assets securing
such indebtedness. The Notes are not guaranteed by any of the Company's
subsidiaries and are therefore structurally subordinated to all of the existing
and future indebtedness and other liabilities of the Company's subsidiaries,
including trade payables.
Prior to October 1, 2022, the 2024 Notes will be redeemable, at the Company's
option, at any time in whole, or from time to time in part, at a price equal to
the greater of 100% of the principal amount of such 2024 Notes to be redeemed
and the sum of the present values of the Remaining Scheduled Payments (as
defined in the Indenture) on the 2024 Notes redeemed that would be due if the
2024 Notes matured on October 1, 2022, discounted to the redemption date on a
semiannual basis at the Treasury Rate (as defined in the Indenture) plus 10
basis points, plus, in either case, accrued and unpaid interest, if any, to (but
excluding) the redemption date. Commencing on October 1, 2022, the Company may
redeem the 2024 Notes, in whole, or from time to time in part, at the Company's
option, at any time, at a redemption price equal to 100% of the principal amount
of the 2024 Notes being redeemed plus accrued and unpaid interest, if any, to
(but excluding) the redemption date. Prior to October 15, 2031 (three months
prior to their maturity date), the 2032 Notes will be redeemable, at the
Company's option, at any time in whole, or from time to time in part, at a price
equal to the greater of 100% of the principal amount of such 2032 Notes to be
redeemed and the sum of the present values of the Remaining Scheduled Payments
on the 2032 Notes redeemed that would be due if the 2032 Notes matured on
October 15, 2031, discounted to the redemption date on a semiannual basis at the
Treasury Rate plus 20 basis points, plus, in either case, accrued and unpaid
interest, if any, to (but excluding) the redemption date. Commencing on
October 15, 2031 (three months prior to their maturity date), the Company may
redeem the 2032 Notes, in whole, or from time to time in part, at the Company's
option, at any time, at a redemption price equal to 100% of the principal amount
of the 2032 Notes being redeemed plus accrued and unpaid interest, if any, to
(but excluding) the redemption date. Prior to April 1, 2041 (six months prior to
their maturity date), the 2041 Notes will be redeemable, at the Company's
option, at any time in whole, or from time to time in part, at a price equal to
the greater of 100% of the principal amount of such 2041 Notes to be redeemed
and the sum of the present values of the Remaining Scheduled Payments on the
2041 Notes redeemed that would be due if the 2041 Notes matured on April 1,
2041, discounted to the redemption date on a semiannual basis at the Treasury
Rate plus 20 basis points, plus, in either case, accrued and unpaid interest, if
any, to (but excluding) the redemption
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date. Commencing on April 1, 2041 (six months prior to their maturity date), the
Company may redeem the 2041 Notes, in whole, or from time to time in part, at
the Company's option, at any time, at a redemption price equal to 100% of the
principal amount of the 2041 Notes being redeemed plus accrued and unpaid
interest, if any, to (but excluding) the redemption date.
Upon the occurrence of a Change of Control Triggering Event (as defined in the
Indenture), unless the Company has exercised its right to redeem the Notes in
full by giving irrevocable notice to the Trustee in accordance with the
Indenture, each holder of the Notes will have the right to require the Company
to purchase all or a portion (equal to $2,000 or whole multiples of $1,000 in
excess thereof) of such holder's Notes at a purchase price equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to (but
excluding) the date of purchase.
In the event that (x) the Blattner Acquisition (as defined in the Indenture) is
not consummated on or prior to June 30, 2022 or (y) the Merger Agreement (as
defined in the Indenture) is terminated without the Blattner Acquisition being
consummated, the Company will be required to redeem all of the outstanding 2024
Notes, 2032 Notes and 2041 Notes at a redemption price equal to 101% of the
aggregate principal amount of the 2024 Notes, 2032 Notes and 2041 Notes,
respectively, then outstanding, plus accrued and unpaid interest, if any, to,
but excluding, the redemption date.
The Indenture contains covenants that, among other things, limit the Company's
ability to incur liens securing certain indebtedness, to engage in certain sale
and leaseback transactions with respect to certain properties and to sell all or
substantially all of the Company's assets or merge or consolidate with or into
other companies. The Indenture also contains customary events of default.
The foregoing description of the Indenture and the Notes does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Base Indenture, the Second Supplemental Indenture, the Third Supplemental
Indenture, the Fourth Supplemental Indenture, the form of 2024 Note, the form of
2032 Note and the form of 2041 Note, copies of which are filed as Exhibits 4.1,
4.2, 4.3, 4.4, 4.5, 4.6 and 4.7, respectively, to this Current Report on Form
8-K 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 in Item 1.01 of this Current Report on Form 8-K with
respect to the Indenture and the Notes is incorporated herein by reference in
its entirety.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number Description
4.1 Indenture, dated as of September 22, 2020, between Quanta
Services, Inc. and U.S. Bank National Association, as
trustee, (previously filed as Exhibit 4.1 to the Company's
Form 8-K filed September 25, 2020 and incorporated herein by
reference).
4.2 Second Supplemental Indenture, dated as of September 23,
2021, between Quanta Services, Inc. and U.S. Bank National
Association, as trustee.
4.3 Third Supplemental Indenture, dated as of September 23,
2021, between Quanta Services, Inc. and U.S. Bank National
Association, as trustee.
4.4 Fourth Supplemental Indenture, dated as of September 23,
2021, between Quanta Services, Inc. and U.S. Bank National
Association, as trustee.
4.5 Form of 0.950% Senior Notes due 2024 (incorporated by
reference from Exhibit 4.2).
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4.6 Form of 2.350% Senior Notes due 2032 (incorporated by
reference from Exhibit 4.3).
4.7 Form of 3.050% Senior Notes due 2041 (incorporated by
reference from Exhibit 4.4).
5.1 Opinion of Latham & Watkins LLP.
23.1 Consent of Latham & Watkins LLP (included in Exhibit 5.1
hereto).
104 Cover Page Interactive Data File (the cover page XBRL tags
are embedded within the Inline XBRL document).
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