| Item 1.01 | Entry into a Material Definitive Agreement. |
On March 10, 2021, Vontier Corporation (the “Company”) completed its previously announced private unregistered offering of $500 million aggregate principal amount of 1.800% Senior Notes due 2026 (the “2026 Notes”), $500 million aggregate principal amount of 2.400% Senior Notes due 2028 (the “2028 Notes”) and $600 million aggregate principal amount of 2.950% Senior Notes due 2031 (the “2031 Notes” and, together with the 2026 Notes and the 2028 Notes, the “Notes”). The Notes are fully and unconditionally guaranteed (the “Guarantees”), on a joint and several basis, by two of the Company’s wholly-owned subsidiaries (the “Guarantors”). The Notes and the Guarantees were offered in the United States to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the United States pursuant to Regulation S under the Securities Act.
The Notes and the Guarantees are the Company’s and the Guarantors’ general senior unsecured obligations, respectively, and (i) rank without preference or priority among themselves and equally in right of payment with all of the Company’s and the Guarantors’ existing and any future unsecured and unsubordinated indebtedness (including the Company’s Credit Agreement (as defined below)); (ii) are senior in right of payment to any existing and future indebtedness that is subordinated to the Notes; (iii) are effectively subordinated to all of the Company’s or the Guarantors’ existing and future secured indebtedness, in each case, to the extent of the assets securing such indebtedness; and (iv) are structurally subordinated to all existing and any future indebtedness and any other liabilities of the Company’s subsidiaries that are not Guarantors of the Notes.
In connection with the offering of the Notes, the Guarantors of the Notes became guarantors under the Company’s Credit Agreement, dated as of September 29, 2020, with Bank of America, N.A., as Administrative Agent, L/C Issuer and Swing Line Lender, and the other Lenders party thereto (the “Credit Agreement”).
The Notes were issued under an Indenture (the “Indenture”), dated as of March 10, 2021, by and among the Company, the Guarantors, and Wilmington Trust, N.A., as trustee (the “Trustee”). The Indenture provides, among other things, that the 2026 Notes will bear interest at a rate of 1.800% per year, the 2028 Notes will bear interest at a rate of 2.400% per year and the 2031 Notes will bear interest at a rate of 2.950% per year, payable semi-annually on April 1 and October 1 of each year, beginning on October 1, 2021, and that the 2026 Notes will mature on April 1, 2026, the 2028 Notes will mature on April 1, 2028 and the 2031 Notes will mature on April 1, 2031, unless earlier redeemed or repurchased by the Company.
The Notes are subject to customary covenants restricting the Company’s and its subsidiaries’ ability, subject to certain exceptions, to incur debt secured by liens or to enter into sale and leaseback transactions and restricting the Company’s and any Guarantor’s ability to merge or consolidate with another entity or sell substantially all of its assets to another person. The Indenture contains customary events of default. In case of certain events of bankruptcy, insolvency or reorganization involving the Company or any of its significant subsidiaries, 100% of the principal of, and accrued and unpaid interest, if any, on all of the then outstanding Notes will automatically become due and payable. In the case of any other event of default, the Trustee or the holders of at least 25% in principal amount of the then outstanding Notes may declare the Notes to be due and payable immediately.
At any time prior to March 1, 2026 (the “2026 Notes Par Call Date”), in the case of the 2026 Notes, at any time prior to February 1, 2028 (the “2028 Notes Par Call Date”), in the case of the 2028 Notes, and at any time prior to January 1, 2031 (the “2031 Notes Par Call Date” and, collectively with the 2026 Notes Par Call Date and the 2028 Notes Par Call Date, each a “Par Call Date”), in the case of the 2031 Notes, the Company may, at is option, redeem some or all of the applicable series of Notes at a redemption price equal to 100% of the principal amount of such series of Notes bring redeemed, plus a “make-whole” premium
