| Item 1.01 | Entry into a Material Definitive Agreement. |
Underwriting Agreement
On January 19, 2021, Commercial Metals Company (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with Citigroup Global Markets Inc. (“Citigroup”) as the representative of the several underwriters named therein (the “Underwriters”), relating to the issuance and sale by the Company of $300.0 million aggregate principal amount of 3.875% Senior Notes due 2031 (the “2031 Notes”). The issuance and sale of the 2031 Notes has been registered under the Securities Act of 1933, as amended, pursuant to a Registration Statement on Form S-3 (the “Registration Statement”) filed with the Securities and Exchange Commission (the “Commission”) on January 19, 2021 (Registration No. 333-252191).
The Underwriting Agreement contains customary representations, warranties, covenants, closing conditions and termination provisions. The Underwriting Agreement also provides for customary indemnification by each of the Company and the Underwriters against certain liabilities arising out of, or in connection with, the sale of the 2031 Notes and customary contribution provisions in respect of those liabilities. Subject to customary closing conditions, the sale of the 2031 Notes is expected to close on or about February 2, 2021.
The Company intends to use the net proceeds from the sale of the 2031 Notes, which net proceeds are expected to be approximately $295.2 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company, together with cash on hand, to fund a cash tender offer (the “Tender Offer”) for any and all of the Company’s outstanding 5.750% Senior Notes due 2026 (the “2026 Notes”) and to redeem any remaining 2026 Notes that are not tendered following the expiration of the Tender Offer, in each case together with accrued interest and expenses related thereto.
Certain of the Underwriters and their respective affiliates have from time to time performed, and may in the future perform, commercial banking, investment banking and advisory services for the Company or its affiliates in the ordinary course of their business for which they have received, or may in the future receive, customary compensation. In particular, certain of the Underwriters and affiliates of certain of the Underwriters are lenders and/or agents under the Company’s credit facility and accounts receivables facilities. In addition, Citigroup is the dealer manager for the Tender Offer. Further, U.S. Bancorp Investments, Inc. is serving as an Underwriter and is an affiliate of U.S. Bank National Association, the trustee of the 2031 Notes. Additionally, certain of the Underwriters or their affiliates may be holders of the 2026 Notes.
The foregoing description of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by reference to the Underwriting Agreement, a copy of which is filed as Exhibit 1.1 to this Current Report on Form 8-K and is incorporated herein by reference.
