| Item 1.01. | Entry into a Material Definitive Agreement. |
On November 18, 2024, Huntington Ingalls Industries, Inc. (the “Company”) completed a public offering of $500 million aggregate principal amount of 5.353% Senior Notes due 2030 (the “2030 Notes”) and $500 million aggregate principal amount of 5.749% Senior Notes due 2035 (the “2035 Notes” and, together with the 2030 Notes, the “Notes,” and such offering, the “Notes Offering”), pursuant to an underwriting agreement (the “Underwriting Agreement”), dated as of November 13, 2024, among the Company, the Guarantors (as defined below) and J.P. Morgan Securities LLC, BofA Securities, Inc., Mizuho Securities USA LLC, Scotia Capital (USA) Inc., U.S. Bancorp Investments, Inc. and Wells Fargo Securities, LLC, as representatives of the several underwriters named therein. The Notes Offering was registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to a registration statement on Form S-3, File No. 333-281250, of the Company and the Guarantors (the “Registration Statement”).
The Notes were issued pursuant to an indenture, dated as of November 18, 2024 (the “Base Indenture”), as supplemented by the First Supplemental Indenture, dated as of November 18, 2024 (the “First Supplemental Indenture,” and together with the Base Indenture, the “Indenture”), each among the Company, the Guarantors and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”).
The Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by each of the Company’s domestic subsidiaries that guarantees debt under the Company’s amended and restated revolving credit facility and, subject to certain exceptions, any domestic subsidiaries that guarantee the Company’s debt in the future under any other credit facilities or capital markets debt (collectively, the “Guarantors,” and such guarantees, the “Guarantees”).
The Notes and the Guarantees are senior unsecured obligations of the Company and the Guarantors, respectively, and rank:
| | • | | senior in right of payment to all of the Company’s and the Guarantors’ future senior subordinated and subordinated indebtedness; |
| | • | | equally in right of payment with any of the Company’s and the Guarantors’ existing and future unsubordinated indebtedness; |
| | • | | effectively junior to all of the Company’s and the Guarantors’ secured indebtedness to the extent of the value of the assets securing such indebtedness; and |
| | • | | structurally junior to all of the obligations, including trade payables, of any of the Company’s subsidiaries that do not guarantee the Notes. |
Interest on the 2030 Notes will accrue at a rate of 5.353% per annum on the principal amount from November 18, 2024, payable semi-annually on January 15 and July 15 of each year, beginning on July 15, 2025. The 2030 Notes will mature on January 15, 2030, subject to earlier redemption or repurchase. Interest on the 2035 Notes will accrue at a rate of 5.749% per annum on the principal amount from November 18, 2024, payable semi-annually on January 15 and July 15 of each year, beginning on July 15, 2025. The 2035 Notes will mature on January 15, 2035, subject to earlier redemption or repurchase.
Subject to certain qualifications and exceptions, the Indenture restricts the Company’s and certain of its subsidiaries’ ability to incur certain debt secured by liens or enter into certain sale and leaseback transactions, and limits the Company’s and each Guarantor’s ability to consolidate, merge or sell or otherwise dispose of all or substantially all of its assets.
Upon the occurrence of a “change in control triggering event,” subject to certain exceptions, the Company must offer to repurchase the Notes of the applicable series at a purchase price of 101% of the principal amount of such notes plus accrued and unpaid interest, if any, to, but excluding, the repurchase date.
