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Item 1.01.
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Entry into a Material Definitive Agreement.
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On April 27, 2020, Snap-on Incorporated (the “Company”) entered into an Underwriting Agreement (the “Underwriting Agreement”) with Citigroup Global Markets Inc., J.P. Morgan Securities LLC and U.S. Bancorp Investments, Inc., as representatives of the several underwriters listed therein (collectively, the “Underwriters”) pursuant to which the Company agreed to sell and the Underwriters agreed to purchase, subject to and upon terms and conditions set forth therein, $500,000,000 aggregate principal amount of the Company’s 3.100% Notes due 2050 (the “Notes”).
The offering of the Notes closed on April 30, 2020.
The Notes were issued pursuant to the Indenture (the “Indenture”), dated as of January 8, 2007, between the Company and U.S. Bank National Association, as Trustee (the “Trustee”), and related officers’ certificate which established the terms of the Notes.
The Company will pay interest on the Notes semi-annually in arrears on May 1 and November 1, beginning on November 1, 2020, to holders of record on the preceding April 15 and October 15, as the case may be. Interest will be calculated on the basis of a 360-day year consisting of twelve 30-day months. The Notes will mature on May 1, 2050 unless redeemed prior to that date.
The Notes are senior unsecured obligations of the Company and rank equally with all of the other existing and future unsecured and unsubordinated senior indebtedness of the Company. The Indenture includes covenants, including limitations on the Company’s ability, subject to exceptions, to incur debt secured by liens and to engage in sale and leaseback transactions. The Indenture also provides for events of default and further provides that the Trustee or the holders of not less than 25% in aggregate principal amount of the outstanding Notes may declare the Notes immediately due and payable upon the occurrence and during the continuance of any event of default after expiration of any applicable grace period. In the case of specified events of bankruptcy, insolvency, receivership or reorganization, the principal amount of the Notes and any accrued and unpaid interest on the Notes automatically become due and payable.
At any time prior to November 1, 2049, the Company may redeem the Notes at a “make-whole” redemption price, plus accrued and unpaid interest on the Notes being redeemed to the redemption date. At any time on or after November 1, 2049, the Company may redeem the Notes at a redemption price equal to 100% of the aggregate principal amount of the Notes being redeemed, plus accrued and unpaid interest on the Notes being redeemed to, but not including, the redemption date. If a change of control repurchase event occurs, the Notes are subject to repurchase by the Company at a repurchase price in cash equal to 101% of the aggregate principal amount of the Notes repurchased plus any accrued and unpaid interest on the Notes, if any, to the date of repurchase.
The Company anticipates using the net proceeds from the sale of the Notes to repay its outstanding commercial paper and for general corporate purposes, which may include working capital and capital expenditures.
The descriptions of the Indenture and the officers’ certificate set forth above are qualified by reference to the terms of the Indenture and the officers’ certificate filed as Exhibits 4.1 and 4.2, respectively, to this Current Report on Form 8-K and incorporated by reference herein.