Item 1.01.
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Entry into a Material Definitive Agreement.
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On February 13, 2017, Silgan Holdings Inc., or the
Company, completed the issuance and sale of $300 million of its 4
3
⁄
4
% Senior Notes due 2025 (the Dollar Notes) and 650 million of its 3
1
⁄
4
% Senior Notes due 2025 (the Euro Notes and, together with Dollar Notes, the Notes) in a previously announced private placement in
reliance on Rule 144A and Regulation S under the Securities Act of 1933, as amended. The Notes were sold pursuant to that certain Purchase Agreement, dated February 8, 2017 among the Company and Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Merrill Lynch International, as representatives of the initial purchasers named therein (the Initial Purchasers), which Purchase Agreement was filed by the Company with its Current Report on Form 8-K filed on
February 10, 2017. The Notes were issued pursuant to, and are governed by, that certain Indenture, dated as of February 13, 2017 (the Indenture), by and among the Company, U.S. Bank National Association, as trustee, Elavon
Financial Services DAC, UK Branch, as paying agent in respect of the Euro Notes, and Elavon Financial Services DAC, as registrar and transfer agent in respect of the Euro Notes.
The net proceeds from the sale of the Dollar Notes were approximately $296.2 million and the net proceeds from the sale of the Euro Notes were approximately
643.2 million, in each case after deducting the Initial Purchasers discount and estimated offering expenses. The Company used the net proceeds from the sale of the Dollar Notes to prepay a portion of its outstanding US Dollar term
loans and repay a portion of its outstanding revolving loans under its senior secured credit facility. The Company used a portion of the net proceeds from the sale of the Euro Notes to prepay all of its outstanding Euro term loans under its senior
secured credit facility. The Company intends to use the remaining net proceeds from the sale of the Euro Notes to repay its outstanding Euro revolving loans under its senior secured credit facility, to repay certain other foreign bank revolving and
term loans of certain of its non-U.S. subsidiaries and to redeem, on or after April 1, 2017, a portion of the Companys outstanding 5% Senior Notes due 2020, or the 5% Notes, and pay the applicable redemption premium therefor.
The Notes are general senior unsecured obligations of the Company and rank equally in right of payment with the Companys existing and future unsecured
unsubordinated indebtedness, including its existing 5% Notes and 5
1
⁄
2
% Senior Notes due 2022, and ahead of the Companys existing and future subordinated
debt. In addition, the Notes are effectively subordinated to all of the Companys secured debt to the extent of the assets securing such debt, including indebtedness under its senior secured credit facility. None of the Companys
subsidiaries are initially guaranteeing the Notes, and therefore the Notes are structurally subordinated to the indebtedness and other liabilities (including trade payables) of the Companys subsidiaries.
The Dollar Notes will bear interest at a rate of 4
3
⁄
4
% per annum
and the Euro Notes will bear interest at a rate of 3
1
⁄
4
% per annum. The Indenture provides that interest on the Notes is payable semiannually in cash in
arrears on March 15 and September 15 of each year, beginning on September 15, 2017, and the Notes mature on March 15, 2025.
Under the
Indenture, the Company has the right to redeem the Dollar Notes, in whole or in part, at any time on or after March 15, 2020 initially at 102.375% of their principal amount, plus accrued and unpaid interest to the redemption date, declining
ratably annually to 100% of their principal amount, plus accrued and unpaid interest to the redemption date, on or after March 15, 2022. Under the Indenture, the Company also has the right to redeem the Euro Notes, in whole or in part, at any
time on or after March 15, 2020 initially at 101.625% of their principal amount, plus accrued and unpaid interest to the redemption date, declining ratably annually to 100% of their principal amount, plus accrued and unpaid interest to the
redemption date, on or after March 15, 2022. Pursuant to the Indenture, at any time before March 15, 2020, the Company also has the right to redeem the Dollar Notes, in whole or in part, at a redemption
price equal to 100% of their principal amount plus a make-whole premium as provided in the Indenture, together with accrued and unpaid interest to the redemption date. Pursuant to the Indenture,
at any time before March 15, 2020, the Company also has the right to redeem the Euro Notes, in whole or in part, at a redemption price equal to 100% of their principal amount plus a make-whole premium as provided in the Indenture, together with
accrued and unpaid interest to the redemption date. In addition, before March 15, 2020, the Company has the right to redeem up to 35% of the aggregate principal amount of outstanding Dollar Notes with the proceeds from sales of certain kinds of
capital stock of the Company at a redemption price equal to 104.750% of their principal amount, plus accrued and unpaid interest to the redemption date. Before March 15, 2020, the Company also has the right to redeem up to 35% of the aggregate
principal amount of outstanding Euro Notes with the proceeds from sales of certain kinds of capital stock of the Company at a redemption price equal to 103.250% of their principal amount, plus accrued and unpaid interest to the redemption date. In
the event of a Change of Control Repurchase Event (as defined in the Indenture), each holder of the Notes has the right to require the Company to purchase such holders Notes at a price of 101% of their principal amount, plus accrued and unpaid
interest to the date of purchase.
The Indenture contains certain covenants which, among other things, limit (i) the Companys ability and the
ability of its restricted subsidiaries to create liens and engage in sale and leaseback transactions; (ii) the Companys ability to consolidate, merge or sell all or substantially all of its assets unless the Company is the surviving
corporation or the surviving corporation or purchaser is a U.S. entity and assumes the obligations under the Notes and the Indenture; and (iii) the ability of the Companys restricted subsidiaries to guarantee certain indebtedness unless
such restricted subsidiaries also guarantee the Notes as provided in the Indenture. Such covenants are subject to a number of important exceptions and qualifications set forth in the Indenture.
The Indenture also contains certain customary events of default in respect of each series of Notes, including failure to make payments in respect of the
principal amount of such series of Notes, failure to make payments of interest on such series of Notes when due and payable which continues for a period of 30 days, failure to comply with certain covenants and agreements for 30 days after notice
thereof and certain events of bankruptcy or insolvency. An event of default under the Indenture will allow the trustee or the holders of at least 25% in aggregate principal amount of the then outstanding applicable series of Notes to declare the
principal of, premium, if any, and accrued and unpaid interest on such series of Notes to be due and payable, or in the case of events of default involving bankruptcy or insolvency, such principal, premium, if any, and accrued and unpaid interest on
such series of Notes will become immediately due and payable without action from the trustee or any holder of such series of Notes.
The foregoing
description of the Indenture and the Notes does not purport to be complete and is qualified in its entirety by reference to the full text of the Indenture, the Form of Dollar Note and the Form of Euro Note, which are attached as Exhibits 4.1, 4.2
and 4.3, respectively, to this Current Report on Form 8-K and incorporated by reference herein.
In addition, on February 13, 2017, the Company
entered into that certain Registration Rights Agreement with the Initial Purchasers pursuant to which the Company has agreed to use its best efforts to (i) file and cause to become effective a registration statement for a registered offer to
exchange the Notes for senior unsecured notes of the Company with terms identical to the Notes and consummate such exchange offer within 360 days after February 13, 2017 or (ii) under certain circumstances, file a shelf registration
statement for registered resales of the Notes and to keep such shelf registration statement effective for up to one year. If within 360 days after February 13, 2017 the exchange offer referred above is not consummated or a shelf registration
statement is not declared effective, the annual interest rate borne by the Notes will be increased by 0.25% per annum until the exchange offer is consummated or a shelf registration statement is declared effective.
The foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified
in its entirety by reference to the full text of the Registration Rights Agreement, which is attached as Exhibit 4.3 to this Current Report on Form 8-K and incorporated by reference herein.