Item 1.01 Entry Into a Material Definitive Agreement.
OnAugust 29, 2022 (the "Closing Date"),Sensata Technologies, B.V . ("STBV"), an indirect, wholly owned subsidiary of the Company, completed the issuance and sale of$500.0 million aggregate principal amount of STBV's 5.875% senior notes due 2030 (the "Notes").
The Company intends to use the net proceeds from the issuance and sale of the Notes to redeem STBV's 4.875% senior notes due 2023.
Indenture
The Notes were issued pursuant to an indenture, dated as of the Closing Date (the "Indenture"), among STBV, the guarantors named therein (the "Guarantors"), andThe Bank of New York Mellon , as trustee (the "Trustee").
Interest and Maturity
The Notes bear interest at a rate of 5.875% per annum and mature onSeptember 1, 2030 . Interest is payable on the Notes onSeptember 1 andMarch 1 of each year, commencing onMarch 1, 2023 .
Guarantees
As of the Closing Date, STBV's obligations under the Notes are guaranteed by each of STBV's wholly owned subsidiaries that is a borrower or guarantor under the senior secured credit facilities of STBV's wholly owned subsidiarySensata Technologies, Inc. (the "Senior Credit Facilities") and an issuer or a guarantor under the following existing senior notes (collectively, the "Existing Notes"): STBV's 4.875% senior notes due 2023, 5.625% senior notes due 2024, 5.000% senior notes due 2025, and 4.000% senior notes due 2029; andSensata Technologies, Inc.'s 4.375% senior notes due 2030 and 3.750% senior notes due 2031. The Notes are STBV's, and the guarantees are the Guarantors', senior unsecured obligations and rank equally in right of payment to all existing and future senior indebtedness of STBV or the Guarantors, respectively, including indebtedness under the Senior Credit Facilities and the Existing Notes. The Notes and the guarantees rank senior in right of payment to all of STBV's and the Guarantors' existing and future indebtedness and other obligations that expressly provide for their subordination to the Notes and the guarantees. The Notes and the guarantees are effectively junior to STBV's and the Guarantors' existing and future secured indebtedness to the extent of the value of the assets securing that indebtedness, including secured indebtedness under the Senior Credit Facilities. The Notes and the guarantees also will be structurally subordinated to all existing and future obligations, including trade payables, of any of, as applicable, STBV's or the respective Guarantor's subsidiaries that do not guarantee the Notes.
Covenants
The Indenture contains covenants that limit the ability of STBV and its subsidiaries to, among other things: incur liens; engage in sale and leaseback transactions; with respect to any subsidiary of STBV, incur indebtedness without such subsidiary's guaranteeing the Notes; or consolidate, merge with, or sell, assign, convey, transfer, lease, or otherwise dispose of all or 2 --------------------------------------------------------------------------------
substantially all of their properties or assets to, another person. These covenants are subject to important exceptions and qualifications set forth in the Indenture.
The guarantees of the Notes and certain of these covenants will be suspended if the Notes are assigned an investment-grade rating by eitherS&P Global Ratings or Moody's Investors Service, Inc. and no default has occurred and is continuing. The guarantees of the Notes and the suspended covenants will be reinstated in the event that the Notes are rated below investment grade by both rating agencies or an event of default has occurred and is continuing at such time. Events of Default The Indenture provides for events of default (subject in certain cases to customary grace and cure periods), which include, among others, nonpayment of principal or interest when due, breach of covenants or other agreements in the Indenture, defaults in payment of certain other indebtedness, certain events of bankruptcy or insolvency, failure to pay certain judgments, and failure of the guarantees of significant subsidiaries to remain in full force and effect. Generally, if an event of default occurs, the Trustee or the holders of at least 25% in principal amount of the then outstanding Notes may declare the principal of and accrued but unpaid interest on all of the Notes to be due and payable immediately. All provisions regarding remedies in an event of default are subject to the Indenture.
Optional Redemption
At any time, and from time to time, prior toSeptember 1, 2025 , STBV may redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes being redeemed, plus a "make whole" premium, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. At any time on or afterSeptember 1, 2025 , STBV may redeem the Notes, in whole or in part, at the following prices (expressed as a percentage of principal amount), plus accrued and unpaid interest, if any, to, but excluding, the redemption date: Period beginningSeptember 1 , Price 2025 102.938% 2026 101.469% 2027 and thereafter 100.000% In addition, at any time prior toSeptember 1, 2025 , STBV may redeem up to 40% of the principal amount of the outstanding Notes (including additional Notes, if any) with the net cash proceeds of certain equity offerings at a redemption price (expressed as a percentage of principal amount) of 105.875%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, provided that at least 60% of the aggregate principal amount of the Notes (including additional Notes, if any) remains outstanding immediately after each such redemption. . . .
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 above is incorporated by reference into this Item 2.03.
Item 3.03 Material Modification to Rights of Security Holders.
The information set forth in Item 1.01 above is incorporated by reference into this Item 3.03.
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Item 8.01 Other Events.
OnAugust 29, 2022 , the Company issued a press release announcing STBV intends to redeem in full all$500,000,000 in aggregate principal amount of its outstanding 4.875% Senior Notes due 2023 (CUSIP Nos. 81725WAG8 and N78840AH3) (the "Notes") onSeptember 28, 2022 .
The Redemption will be made in accordance with the terms of the indenture governing the Notes and the terms of the notice of redemption that is being sent to all registered holders of the Notes by the trustee for the Notes.
The press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description Indenture , dated as of August 29, 2022, amo ng Sensata Technologies 4.1 B.V., the Guar antors named therein,
and
Mellon, as T r ustee. August 29, 2022 press release entitled "Sensata Technologies Holding plc 99.1 Announces Upcoming Redemption of 4.875% Senior
Notes due 2023 by
Technologies B.V. " 104 Cover Page Interactive Data File (embedded
within Inline XBRL document).
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