Item 1.01. Entry into a Material Definitive Agreement.
Secured Notes
On
Interest on the Notes will accrue at the rate of 3.750% per annum and will be
payable semi-annually in arrears on
Ranking
The Notes are the Issuer's senior secured obligations and are secured on an equal and ratable basis with all existing and future indebtedness secured with the same security arrangements as the Notes, including the Existing Secured Notes and the Credit Facilities (each as defined below). The Notes rank senior in right of payment to the Issuer's existing and future subordinated indebtedness; rank equally in right of payment with all of the Issuer's existing and future senior indebtedness, including the Issuer's 3.875% Senior Notes due 2030 (the "3.875% Existing Secured Notes"), the Issuer's 2.750% Senior Secured Notes due 2028 (the "2.750% Existing Secured Notes"), the Issuer's 3.000% Senior Secured Notes due 2031 (the "3.000% Existing Secured Notes") and the Issuer's 2.250% Senior Secured Notes due 2031 (the "2.250% Existing Secured Notes" and, together with the 3.875% Existing Secured Notes, the 2.750% Existing Secured Notes and the 2.250% Existing Secured Notes, the "Existing Secured Notes") and indebtedness under the Issuer's senior secured revolving credit facility with Credit Suisse AG, as administrative agent, and the other financial institutions and lenders from time to time party thereto (the "Revolving Credit Facility") and the Issuer's senior secured term loan credit facility with Credit Suisse AG, as administrative agent, and the other financial institutions and lenders from time to time party thereto (the "Term Credit Facility" and, together with the Revolving Credit Facility, the "Credit Facilities") and any future senior secured credit facility; are effectively senior to the Issuer's unsecured senior indebtedness to the extent of the value of the collateral securing the Notes; and are structurally subordinated in right of payment to all existing and future indebtedness and other liabilities of any of the Issuer's non-guarantor subsidiaries (other than indebtedness and liabilities owed to the Issuer or one of its subsidiary guarantors (as such term is defined below)).
Guarantees
The Notes are fully and unconditionally guaranteed on a senior secured basis by each of the Issuer's existing direct or indirect wholly-owned domestic restricted subsidiaries and by any such subsidiaries that guarantee obligations of the Issuer under the Credit Facilities, subject to customary exceptions. Such subsidiary guarantors are collectively referred to herein as the "subsidiary guarantors," and such subsidiary guarantees are collectively referred to herein as the "subsidiary guarantees." Each subsidiary guarantee is a senior secured obligation of such subsidiary guarantor and is secured on an equal and ratable basis with all existing and future obligations of such subsidiary guarantor that are secured with the same security arrangements as the guarantee of the Notes (including the subsidiary guarantor's guarantee of obligations under the Existing Secured Notes and the Credit Facilities). Each subsidiary guarantee ranks senior in right of payment to all subordinated obligations of the subsidiary guarantor; is effectively senior to the subsidiary guarantor's existing unsecured obligations, to the extent of the collateral securing such guarantee; ranks equally in right of payment with all of the subsidiary guarantor's existing and future senior obligations, including the subsidiary guarantor's guarantee of the Credit Facilities and any future senior secured credit facility and the Existing Secured Notes; and is structurally subordinated in right of payment to all existing and future indebtedness and other liabilities of any non-guarantor subsidiary of the subsidiary guarantor (other than indebtedness and liabilities owed to the Issuer or one of its subsidiary guarantors). Any subsidiary guarantee of the Notes may be released in certain circumstances.
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Optional Redemption
At any time prior to
(1) at least 50% of the aggregate principal amount of the Notes originally issued under the Base Indenture (including the aggregate principal amount of any additional notes of the same series) remains outstanding immediately after the occurrence of such redemption (unless all Notes are otherwise repurchased or redeemed substantially concurrently with the corresponding Equity Offering Redemption); and
(2) notice of such redemption is given no more than 180 days after the date of, and may be conditioned upon, the closing of such equity offering.
The Notes may be redeemed, in whole or in part, at any time prior to
On or after
Year Percentage 2024 101.875 % 2025 100.938 % 2026 and thereafter 100.000 %
In addition, during any 12-month period prior to
Special Optional Redemption
At any time on one or more occasions on or prior to the fifth business day
following
Change of Control
Upon the occurrence of a change of control triggering event, which is defined in the Base Indenture, each holder of the Notes has the right to require the Issuer to repurchase some or all of such holder's Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the repurchase date.
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Covenants
The Indenture contains covenants limiting, among other things, the Issuer's ability and the ability of most of its subsidiaries to create liens and consolidate, merge, sell or otherwise dispose of all or substantially all of its assets.
Events of Default
The Indenture also provides for events of default which, if any of them occurs, would permit or require the principal of and accrued interest on Notes to become or to be declared due and payable.
The foregoing descriptions of the Base Indenture, the Sixth Supplemental Indenture and the Notes do not purport to be complete and are qualified in their . . .
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information contained in Item 1.01 concerning the Issuer's direct financial obligations under the Notes is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit Number Description 4.1 Indenture, dated as ofJune 29, 2020 , amongWMG Acquisition Corp. , the guarantors listed on the signature pages thereto, Credit Suisse AG, as Notes Authorized Representative and as Collateral Agent, andComputershare Trust Company, N.A. , as successor toWells Fargo Bank, National Association , as Trustee, providing for the issuance of secured notes in series (incorporated by reference to Exhibit 4.1 to the Current Report ofWarner Music Group Corp. on Form 8-K filed onJune 30, 2020 ). 4.2 Sixth Supplemental Indenture, dated as ofNovember 24, 2021 , amongWMG Acquisition Corp. , the guarantors listed on the signature pages thereto andComputershare Trust Company, N.A. , as successor toWells Fargo Bank, National Association , as Trustee, relating to the 3.750% Senior Secured Notes due 2029. 4.3 Form of 3.750% Senior Secured Note due 2029 (included in Exhibit 4.1 hereto). 104 Cover Page to this Current Report on Form 8-K in Inline XBRL. 4
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