Covenants; Events of Default
The Indenture contains covenants that, among other things, limit the ability of Parent and its restricted subsidiaries to incur additional indebtedness or issue certain preferred shares, pay dividends, redeem stock or make other distributions, make certain investments, sell or transfer certain assets, create liens, consolidate, merge, sell or otherwise dispose of all or substantially all of Parent’s or the Issuer’s assets, enter into certain transactions with affiliates, and designate subsidiaries as unrestricted subsidiaries. These covenants are subject to a number of important exceptions and qualifications. Neither HWP nor the Company is subject to the restrictive covenants of the Indenture. The Notes also contain customary events of default, the occurrence of which could result in the principal of and accrued interest on the Notes to become or be declared due and payable.
A copy of the Indenture is attached to this Current Report on Form8-K as Exhibit 4.1 and incorporated herein by reference. The summary set forth above is qualified in its entirety by reference to Exhibit 4.1.
Registration Rights Agreement with respect to 4.875% Senior Notes due 2030
On June 20, 2019, the Issuer, the Company, the other guarantors of the Notes and BofA Securities, Inc., on behalf of the several initial purchasers of the Notes (the “Initial Purchasers”), entered into a Registration Rights Agreement with respect to the Notes (the “Registration Rights Agreement”). Under the Registration Rights Agreement, the Issuer and the guarantors have agreed that they will use their respective commercially reasonable efforts to (i) file a registration statement on an appropriate registration form with respect to a registered offer to exchange the Notes for new notes, with terms substantially identical in all material respects to the Notes and (ii) cause the exchange offer registration statement to be declared effective under the Securities Act.
The Issuer and the guarantors have agreed to use their commercially reasonable efforts to cause the exchange offer to be consummated or, if required, to have one or more shelf registration statements declared effective, within 450 days after the issue date of the Notes (or such later date as may be permitted in accordance with the Registration Rights Agreement). If the Issuer and the guarantors fail to satisfy this obligation (a “registration default”), the annual interest rate on each series of Notes will increase by 0.25% for the first90-day period immediately following the occurrence of the registration default. The annual interest rate on each series of Notes will increase by an additional 0.25% for each subsequent90-day period during which the registration default continues, up to a maximum additional interest rate of 1.0% per annum. If the registration default is corrected, the interest rate on each series of Notes will revert to the original level.
If the Issuer must pay additional interest, it will pay holders of the Notes in cash on the same dates that the Issuer makes other interest payments on the Notes, until the registration default is corrected.
A copy of the Registration Rights Agreement is attached to this Current Report on Form8-K as Exhibit 4.3 and incorporated herein by reference. The summary set forth above is qualified in its entirety by reference to Exhibit 4.3.
Credit Agreement Amendment
On June 21, 2019, Parent, an indirect subsidiary of the Company, entered into Amendment No. 6 (the “Amendment”) to the Credit Agreement dated as of October 25, 2013 (as amended by Amendment No. 1 to the Credit Agreement dated as of August 18, 2016, as further amended by Amendment No. 2 to the Credit Agreement dated as of November 21, 2016, as further amended by Amendment No. 3 to the Credit Agreement dated as of March 16, 2017, as further amended by Amendment No. 4 to the Credit Agreement dated as of April 19, 2018 and as further amended by Amendment No. 5 to the Credit Agreement dated as of June 5, 2019, the “Credit Agreement”). After giving effect to the Amendment, the Term Loan Prepayment, the aggregate principal amount of termB-2 loans outstanding under the Credit Agreement will equal approximately $2,619.29 million (the “Refinanced TermB-2 Loans”). The Refinanced TermB-2 Loans (i) will mature on the date that is seven years from the effective date of the Amendment and (ii) provide for (a) a premium of 1.00% of the aggregate principal amount of any Refinanced TermB-2 Loans prepaid as a result of certain repricing transactions occurring within six months of the effective date of the Amendment and (b) quarterly amortization payments to be made on the last business day of each quarter in an aggregate principal amount equal to 0.25% per annum of the original principal amount of the Refinanced TermB-2 Loans, with the remaining amount payable on the maturity date with respect to such Refinanced TermB-2 Loans. After giving effect to the Term Loan Prepayment on the effective date of the Amendment, Parent will have satisfied its obligation to make any required amortization payments in respect of the Refinanced TermB-2 Loans under the Credit Agreement.
All other terms of the Refinanced TermB-2 Loans and the Credit Agreement will remain substantially the same except as otherwise amended by the Amendment.
Certain of the participants in the Credit Agreement and their respective affiliates have engaged in, and may in the future engage in, investment banking, advisory roles and other commercial dealings in the ordinary course of business with the Company and/or its affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions.
