Item 1.01. Entry into a Material Definitive Agreement.
First Supplemental Indenture
Overview
OnNovember 2, 2020 , 1011778B.C. Unlimited Liability Company , an unlimited liability company organized under the laws ofBritish Columbia (the "Issuer"), andNew Red Finance, Inc. , aDelaware corporation and a direct wholly owned subsidiary of the Issuer (the "Co-Issuer" and, together with the Issuer, the "Issuers"), each a subsidiary ofRestaurant Brands International Inc. , a corporation organized under the laws ofCanada (the "Company"), entered into a first supplemental indenture (the "First Supplemental Indenture") to that certain indenture, dated as ofOctober 5, 2020 (the "Base Indenture" and, together with the First Supplemental Indenture, the "Indenture"), each by and among the Issuers, the guarantors party thereto (the "Guarantors") andWilmington Trust, National Association , as trustee and collateral agent, in connection with the issuance and sale by the Issuers toMorgan Stanley & Co. LLC and certain other initial purchasers of$1,500 million aggregate principal amount of 4.000% Second Lien Senior Secured Notes due 2030 (the "Additional Notes"). The Additional Notes are Additional Notes under and as defined in the Indenture and are treated as a single series with the$1,400 million aggregate principal amount of 4.000% Second Lien Senior Secured Notes due 2030 (the "Initial Notes" and, together with the Additional Notes, the "Notes") previously issued under the Indenture and have substantially the same terms as those of the Initial Notes for all purposes under the Indenture, including, waivers, amendments, redemptions and offers to purchase. The Issuers expect to use the proceeds from the issuance of the Additional Notes and cash on hand to repay all of the Issuers'$1,450 million outstanding 5.000% Second Lien Senior Secured Notes due 2025 (the "2025 Second Lien Notes"), plus any accrued and unpaid interest thereon, and pay related premium, fees and expenses. The Additional Notes issued pursuant to Regulation S ("Regulation S") under theU.S. Securities Act of 1933, as amended (the "Securities Act") are initially issued bearing a temporary CUSIP number that differs from the CUSIP number under which the Initial Notes issued pursuant to Regulation S currently trade. As promptly as practicable following the 40th day after the issue date, we intend to cause the Additional Notes issued pursuant to Regulation S to be consolidated with and share the same CUSIP number as the Initial Notes issued pursuant to Regulation S. Following such consolidation, we expect that the Additional Notes issued pursuant to Regulation S will be fungible with the Initial Notes issued pursuant to Regulation S for trading purposes.
Interest; Ranking; Guarantees; Security
The Notes will mature onOctober 15, 2030 and bear interest at a rate of 4.000% per annum, payable semi-annually in cash in arrears onApril 15 andOctober 15 of each year, beginning onApril 15, 2021 . The Notes are second lien senior secured obligations and are (i) equal in right of payment with all of the Issuers' existing and future senior debt, including borrowings under the Issuers' senior secured first lien term loan A facility (the "Term Loan A Facility") and senior secured first lien term loan B facility (the "Term Loan B Facility" and, together with the Term Loan A Facility, the "Term Loan Facilities"), the revolving credit facility (the "Revolving Credit Facility" and, together with the Term Loan Facilities, the "Senior Secured Credit Facilities") and the obligation under the Issuers' remaining 2025 Second Lien Notes, the Issuers' 4.375% Second Lien Senior Secured Notes due 2028 (the "2028 Second Lien Notes" and, together with the 2025 Second Lien Notes, the "Existing Second Lien Notes"), the Issuers' 4.250% First Lien Senior Secured Notes due 2024 (the "2024 First Lien Notes"), the Issuers' 5.750% FirstLien Senior Secured Notes due 2025 (the "2025 First Lien Notes") and the Issuers' 3.875% First Lien Senior Secured Notes due 2028 (the "2028 First Lien Notes" and, together with the 2024 First Lien Notes and the 2025 First Lien Notes, the "Existing First Lien Notes" and, together with the Existing Second Lien Notes, the "Existing Notes"); (ii) effectively subordinated in right of payment to all of the Issuers' existing and future indebtedness that is secured by a lien on the collateral on a first-priority basis, including the Senior Secured Credit Facilities and the Existing First Lien Notes, to the extent of the value of the collateral securing such debt; (iii) equal in right of payment with all of the Issuers' existing and future second-priority senior secured debt, including obligations under the Existing Second Lien Notes, to the extent of the value of the collateral securing such debt; (iv) effectively senior in the right of payment to all of the Issuers' existing and future unsecured senior debt and junior lien debt, to the extent of the value of the collateral securing the Notes; (v) senior in right of payment to all of the Issuers' future subordinated debt; and (vi) structurally subordinated to all existing and future liabilities of the Issuers' non-guarantor subsidiaries.
The Notes are guaranteed (the "Guarantees") fully and unconditionally, and jointly and severally, on a second lien senior secured basis by each of the Issuers' wholly owned restricted subsidiaries that guarantee the Issuers' obligations under certain credit facilities (including the Senior Secured Credit Facilities).
The Guarantees will be the Guarantors' second-priority senior secured obligations and will be (i) equal in right of payment with all of such Guarantors' existing and future senior debt, including borrowings under and guarantees of the Senior Secured Credit Facilities and guarantees in respect of the Existing Notes; (ii) effectively subordinated in right of payment to all of such -------------------------------------------------------------------------------- Guarantors' existing and future first-priority senior secured debt, including the borrowings under and guarantees of the Senior Secured Credit Facilities and the obligations under the Existing First Lien Notes and the existing notes of TheTDL Group Corp. (which are secured by a first-priority lien on the assets of TheTDL Group Corp. ), to the extent of the value of the collateral securing such first-priority debt; (iii) equal in right of payment with all of such Guarantors' existing and future second-priority senior secured debt, including the guarantees with respect of the Existing Second Lien Notes, to the extent of the value of the collateral securing the Guarantees; (iv) effectively senior to all of such Guarantors' existing and future unsecured senior debt and junior lien debt to the extent of the value of the collateral securing the guarantees; (v) senior in right of payment to all of such Guarantors' future subordinated debt; and (vi) structurally subordinated to all existing and future liabilities of all such Guarantors' non-guarantor subsidiaries.
Optional Redemption
The Issuers may redeem some or all of the Notes at any time prior toOctober 15, 2025 at a price equal to 100% of the principal amount of the Notes redeemed plus a "make-whole" premium, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. The Issuers may redeem some or all of the Notes at any time on or afterOctober 15, 2025 at the redemption prices set forth in the Indenture. In addition, at any time prior toOctober 15, 2023 , up to 40% of the original aggregate principal amount of the Notes may be redeemed with the net proceeds of certain equity offerings, at the redemption price specified in the Indenture. The Notes may also be redeemed upon certain changes in tax laws. In connection with any tender offer for the Notes, including a change of control offer or an asset sale offer, the Issuers will have the right to redeem the Notes at a redemption price equal to the amount offered in that tender offer if holders of not less than 90% in aggregate principal amount of the outstanding Notes validly tender and do not withdraw such Notes in such tender offer.
Change of Control
If the Issuers experience a change of control, the Issuers must offer to repurchase the Notes from the holders thereof at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest (including additional amounts specified in the Indenture, if any), if any, to, but excluding, the date of such repurchase.
Covenants and Events of Default
The terms of the Indenture, among other things, limit the ability of the Issuer and its restricted subsidiaries to (i) incur additional indebtedness or guarantee indebtedness; (ii) create liens or use assets as security in other transactions; (iii) declare or pay dividends, redeem stock or make other distributions to stockholders; (iv) make investments; (v) merge, amalgamate or consolidate, or sell, transfer, lease or dispose of substantially all of the Issuers' assets; (vi) enter into transactions with affiliates; (vii) sell or transfer certain assets; and (viii) agree to certain restrictions on the ability of restricted subsidiaries to make payments to the Issuers and their restricted subsidiaries. These covenants are subject to a number of important conditions, qualifications, exceptions and limitations that are described in the Indenture. The Indenture provides for customary events of default (subject in certain cases to customary grace and cure periods), which include payment defaults, a failure to pay certain judgments and certain events of bankruptcy and insolvency. These events of default are subject to a number of important qualifications, . . .
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information included in Item 1.01 of this Current Report is incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description Indenture, dated as ofOctober 5, 2020 , by and among 1011778B.C. Unlimited Liability Company , as issuer,New Red Finance, Inc. , as 4.16 co-issuer, the guarantors from time to time party thereto andWilmington Trust, National Association , as trustee and
collateral agent (incorporated
by reference to Exhibit 4.16 ofRestaurant Brands International Inc.'s Current Report on Form 8-K, datedOctober 13, 2020 ). Form of 4.000% Second Lien Senior Secured Notes
due 2030 (incorporated by
4.16(a) reference to Exhibit 4.16(a) of Restaurant Brands
Current Report on Form 8-K, datedOctober 13 ,
2020).
First Supplemental Indenture, dated as of
4.17 1011778B.C. Unlimited Liability Company , as
issuer,
as co-issuer, the guarantors party thereto and
Association, as trustee and collateral agent. 104 Cover Page Interactive Data File (the cover page tags are embedded within the Inline XBRL document).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
© Edgar Online, source