| Item 1.01 | Entry into a Material Definitive Agreement. |
Indenture
On March 12, 2021, the Company completed a public offering of $300 million aggregate principal amount of its 2.300% Senior Notes due 2031 (the “Notes”). The offering of the Notes was made pursuant to the prospectus supplement dated March 3, 2021 and filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 5, 2021 (the “Prospectus Supplement”) and the prospectus dated May 16, 2019 that forms a part of the Company’s shelf registration statement on Form S-3 (Registration No. 333-231543) filed with the SEC on May 16, 2019.
The Notes were sold pursuant to an underwriting agreement, dated March 3, 2021, between the Company and BofA Securities, Inc., J.P. Morgan Securities LLC and HSBC Securities (USA) Inc., as representatives of the several underwriters listed in Schedule I thereto. The Notes were issued under the Indenture, dated as of September 15, 1995 (the “Base Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank of New York Trust Company, N.A. (successor as trustee to JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank, formerly known as The Chase Manhattan Bank, formerly known as Chemical Bank))), as trustee (the “Trustee”), as supplemented by the Sixth Supplemental Indenture, dated as of March 12, 2021 (the “Sixth Supplemental Indenture,” and the Base Indenture as heretofore supplemented and as supplemented by the Sixth Supplemental Indenture, the “New Notes Indenture”), between the Company and the Trustee.
The net proceeds from the offering were approximately $295.5 million after deducting the underwriting discount and estimated offering expenses payable by the Company. The Company expects to use the net proceeds from the offering of the Notes, together with cash on hand, to redeem in full all of the Company’s outstanding 3.625% Senior Notes due 2022 in an aggregate principal amount of $300 million, which have a stated maturity date of November 15, 2022 (the “2022 Notes”), and to pay any premium and accrued interest in respect thereof. On March 3, 2021, the Company delivered a Notice of Full Redemption to the holders of the 2022 Notes stating that the 2022 Notes will be redeemed on April 2, 2021.
The Notes will bear interest at a rate of 2.300% per annum from March 12, 2021. Interest on the Notes will be payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2021. The Notes will mature on March 15, 2031.
The Company may redeem all or part of the Notes at any time prior to maturity at the redemption prices set forth in the New Notes Indenture.
In the event of a change in control triggering event (as defined in the Sixth Supplemental Indenture), the holders of the Notes may require the Company to purchase for cash all or a portion of their Notes at a purchase price equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest, if any, on the notes repurchased to, but excluding, the repurchase date.
The Notes will be the Company’s unsecured, unsubordinated obligations, ranking equally in right of payment with the Company’s other existing and future unsecured, unsubordinated indebtedness from time to time outstanding, and effectively subordinated in right of payment to all of the Company’s current and future secured indebtedness to the extent of the value of the assets securing such indebtedness. The Notes will be exclusively obligations of the Company and will not be guaranteed by any of its subsidiaries. As a result, the Notes will be structurally subordinated to existing or future preferred stock, indebtedness, guarantees and other liabilities, including trade payables, of such subsidiaries.
The New Notes Indenture also contains customary covenant and event of default provisions.
Please refer to the Prospectus Supplement for additional information regarding the offering and the terms and conditions of the Notes. The foregoing summary of the Notes does not purport to be complete and is qualified in its entirety by reference to the full text of the Base Indenture, the Sixth Supplemental Indenture and the form of the Notes, which are attached to this Current Report on Form 8-K as Exhibits 4.1, 4.2 and 4.3, respectively, and are incorporated into this Item 1.01 by reference.
