| Item 1.01. | Entry into a Material Definitive Agreement. |
On June 22, 2021, APi Group DE, Inc. (the “Issuer”), a wholly-owned subsidiary of APi Group Corporation (the “Company”), completed its previously announced private offering of $350 million aggregate principal amount (the “Offering”) of 4.125% Senior Notes due 2029 (the “Notes”).
The Notes and the related guarantees were offered in the United States to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the United States to persons reasonably believed to be non-U.S. investors pursuant to Regulation S under the Securities Act.
The Notes were issued pursuant an indenture, dated June 22, 2021 (the “Indenture”), by and among the Issuer, the Company, the subsidiary guarantors named therein (together with the Company, the “Guarantors”) and Computershare Trust Company, N.A., as trustee (the “Trustee”).
The Notes will mature on July 15, 2029, unless earlier redeemed, and bear interest at a rate of 4.125% per year until maturity. Interest will be payable in cash, semi-annually in arrears, on January 15 and July 15 of each year, beginning on January 15, 2022. The Issuer will make each interest payment to the holders of record to be determined on the immediately preceding January 1 and July 1.
The Notes and the guarantees, respectively, will be the Issuer’s and the Guarantors’ senior unsecured obligations and will be (i) effectively subordinated to any of the Issuer’s and the Guarantors’ existing and future secured indebtedness, including existing and future secured indebtedness under the Issuer’s Credit Agreement, dated October 1, 2019, as may be amended or supplemented from time to time, to the extent of the value of the collateral securing such secured indebtedness, (ii) pari passu in right of payment with all of the Issuer’s and the Guarantors’ existing and future senior indebtedness, including existing and future indebtedness under the Credit Agreement; (iii) senior in right of payment to any of the Issuer’s and the Guarantors’ subordinated indebtedness; and (iv) structurally subordinated to all of the existing and future indebtedness, claims of holders of preferred stock and other liabilities of each of the Company’s non-guarantor subsidiaries.
The Issuer will have the option to redeem all or a portion of the Notes at any time on or after July 15, 2024 at the redemption prices set forth in the Indenture. In addition, the Issuer may, before July 15, 2024, redeem up to 35% of the aggregate principal amount of the Notes with the net proceeds of certain equity offerings at the redemption price set forth in the Indenture, subject to certain conditions. Further, the Issuer may redeem all or a portion of the Notes at any time prior to July 15, 2024 at a price equal to 100% of the principal amount, plus a “make-whole” premium plus accrued and unpaid interest, if any, to the date of redemption.
If a change of control of the Company occurs, unless the Issuer has previously or concurrently mailed a redemption notice with respect to all the outstanding Notes, the Issuer will make an offer to purchase all of the Notes at a price in cash equal to 101% of the aggregate principal amount, plus accrued and unpaid interest, if any, to the date of the purchase, subject to the rights of holders of the Notes of record on the relevant record date to receive interest due on the relevant interest payment date.
The Indenture contains covenants that limit the Company’s ability (and the Company’s restricted subsidiaries’ ability) to, among other things: (i) incur additional indebtedness; (ii) pay dividends or make other distributions or repurchase or redeem capital stock; (iii) prepay, redeem or repurchase certain debt; (iv) make loans and investments; (v) sell, transfer and otherwise dispose of assets; (vi) incur or permit to exist certain liens; (vii) enter into transactions with affiliates; (viii) enter into agreements restricting subsidiaries’ ability to pay dividends; and (ix) consolidate, amalgamate, merge or sell all or substantially all assets.
