Tyco International PLC (TYC) filed a Form 8K - Entry Into a
Definitive Agreement - with the U.S Securities and Exchange
Commission on March 16, 2016.
Term Loan Facility
On March 10, 2016, Tyco International Holding S. r.l. (the
"Borrower"), an indirect wholly owned subsidiary of Tyco
International plc ("Tyco"), entered into a Term Loan Credit
Agreement among the Borrower, each of the lenders named therein,
Citibank, N.A. ("Citibank"), as administrative agent, and Citigroup
Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Wells Fargo Securities, LLC and JPMorgan Chase Bank,
N.A., as joint lead arrangers and joint bookrunners, providing for
a senior unsecured term loan facility in the amount of
$4,000,000,000 (the "Term Loan Agreement") to finance the cash
consideration for, and fees, expenses and costs incurred in
connection with, the merger (the "Merger") of Jagara Merger Sub LLC
("Merger Sub"), a subsidiary of Tyco, with and into Johnson
Controls, Inc. ("Johnson Controls") with Johnson Controls as the
surviving corporation, pursuant to the Agreement and Plan of Merger
(the "Merger Agreement") dated as of January 24, 2016 by and among
Johnson Controls, Tyco and Merger Sub.
Any loans borrowed under the Term Loan Agreement will be made in
a single borrowing on the closing date of the facility and will
have a maturity of 3.5 years and be denominated in U.S. dollars.
The closing of the term loan facility and the funding of such
loans, if requested, shall only occur upon the satisfaction or
waiver of certain conditions that we believe to be customary for
this type of facility, including that the consummation of the
Merger in accordance with the terms of the Merger Agreement.
Neither Tyco nor any other direct or indirect parent of the
Borrower will be a borrower under, or guarantor of, the term loan
facility. The term loan facility is being provided to the Borrower
on the basis of its properties, assets and credit only, and will
not be guaranteed, or otherwise supported, directly or indirectly,
by the legacy Johnson Controls entities, properties, assets or
credit.
Borrowings under the Term Loan Agreement will bear interest at a
rate per annum equal to, at the option of the Borrower, (1) LIBOR
plus an applicable margin based on, at any time of determination,
the total leverage ratio of the Borrower, or (2) an alternate base
rate equal to the highest of (i) Citibank's prime rate, (ii) the
federal funds effective rate plus 1/2 of 1% and (iii) one-month
LIBOR plus 1%, in each case plus an applicable margin based on, at
any time of determination, the total leverage ratio of the
Borrower. The Term Loan Agreement also requires payment to the
lenders of a ticking fee accruing from the date that is thirty days
after March 10, 2016, in an amount equal to 0.15% per annum of the
aggregate commitments outstanding from time to time under the Term
Loan Agreement payable on the earlier of (i) the date the Term Loan
Agreement is terminated without funding of the loans and (ii) the
date upon which the closing occurs.
Voluntary prepayments on the loans and voluntary reductions of
unfunded commitments under the term loan facility are permissible
without penalty, subject to certain conditions pertaining to
minimum notice and minimum reduction amounts. In addition, the Term
Loan Agreement requires, prior to the termination of the
commitments in accordance with the terms thereunder, a commitment
reduction with the net cash proceeds received by or on behalf of
Tyco or any of its subsidiaries (as applicable) in respect of the
incurrence of certain indebtedness, the issuance of equity
securities, and asset sales, in each case, subject to certain
thresholds and exceptions set forth in the Term Loan Agreement.
Additionally, the Term Loan Agreement requires, after the making of
the loans at closing, a mandatory prepayment with the net cash
proceeds received by the Borrower or any of its subsidiaries from
certain types of asset sales made to affiliates, subject to
thresholds and exceptions set forth in the Term Loan Agreement.
The Term Loan Agreement contains affirmative and negative
covenants that we believe are usual and customary for senior
unsecured credit agreements, including a financial covenant
requiring the Borrower to maintain a 3.5 to 1.0 leverage ratio,
which is the ratio of the Borrower's consolidated debt to its
consolidated EBITDA, each as defined in the Term Loan
Agreement.
The negative covenants in the Term Loan Agreement include, among
other things, limitations (each of which is subject to customary
exceptions for financings of this type) on the ability of the
Borrower and its subsidiaries to:
* grant liens;
* enter into transactions resulting in fundamental changes (such
as mergers or sales of all or substantially all of the assets of
the Borrower);
* restrict subsidiary dividends or other subsidiary
distributions;
* enter into transactions with affiliates (with certain specific
limitations applicable to transactions with Tyco or subsidiaries of
Tyco other than the Borrower or any of its subsidiaries);
* permit subsidiaries to provide guarantees to other material
debt;
* and incur additional subsidiary debt.
The Term Loan Agreement also contains customary events of
default (subject to grace periods, as appropriate) including among
others: nonpayment of principal, interest or fees; breach of the
financial, affirmative or negative covenants; inaccuracy of the
representations or warranties in any material respect; payment
default on, or acceleration of, other material indebtedness;
bankruptcy or insolvency; material unsatisfied judgments; certain
ERISA violations; invalidity or unenforceability of the Term Loan
Agreement or other documents associated with the Term Loan
Agreement; and a change of control.
The representations and warranties, covenants and events of
default in the Term Loan Agreement will apply only to the Borrower
and its subsidiaries and not to Tyco, the direct or other indirect
parent companies of the Borrower or any other subsidiaries of each
of them (including Johnson Controls and its subsidiaries).
Revolving Credit Facility
On March 10, 2016, the Borrower entered into a Multi-Year Senior
Unsecured Credit Agreement among the Borrower, each of the lenders
named therein, Citibank, as administrative agent, and Citigroup
Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Barclays Bank plc, Wells Fargo Securities, LLC and
JPMorgan Chase Bank, N.A. as joint lead arrangers and joint
bookrunners, providing for revolving credit commitments in the
aggregate amount of $1,000,000,000 (the "Revolving Credit
Agreement").
The closing of the revolving credit facility, and the Borrower's
ability to borrow under the Revolving Credit Agreement remains
subject to the satisfaction or waiver of customary conditions
contained therein, including the consummation of the Merger
referred to above and the termination of the commitments of the
lenders, and payments of all amounts outstanding, under the Amended
and Restated Five-Year Senior Unsecured Credit Agreement dated as
of August 7, 2015 among Tyco International Finance S.A., as
borrower, Tyco, as guarantor, the lenders party thereto and
Citibank, as administrative agent, which provides for revolving
credit commitments in the aggregate amount of $1,500,000,000 and
which is scheduled to expire in August 2020.
Neither Tyco nor any other direct or indirect parent of the
Borrower will be a borrower under, or guarantor of, the revolving
credit facility. The revolving credit facility is being provided to
the Borrower on the basis of its properties, assets and credit
only, and will not be guaranteed, or otherwise supported, directly
or indirectly, by the legacy Johnson Controls entities, properties,
assets or credit.
The Revolving Credit Agreement has a scheduled maturity date of
August 7, 2020 and it includes an option for the Borrower to
request an increase in the aggregate principal amount of the
commitments, subject to satisfying the conditions therefor,
including obtaining increased commitments from the lenders or new
commitments from third-party financial institutions. The
commitments under the Revolving Credit Agreement may be increased
up to the amount of $1,250,000,000.
Borrowings under the Revolving Credit Agreement may be borrowed
in U.S. dollars and used for general corporate purposes.
...This item was truncated.
The full text of this SEC filing can be retrieved at:
http://www.sec.gov/Archives/edgar/data/833444/000083344416000139/a8-kxcreditagreements.htm
Any exhibits and associated documents for this SEC filing can be
retrieved at:
http://www.sec.gov/Archives/edgar/data/833444/000083344416000139/0000833444-16-000139-index.htm
Public companies must file a Form 8-K, or current report, with
the SEC generally within four days of any event that could
materially affect a company's financial position or the value of
its shares.
(END) Dow Jones Newswires
March 16, 2016 16:28 ET (20:28 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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