Item 1.01. Entry Into a Material Definitive Agreement.
On January 4, 2021, Valvoline Inc. ("Valvoline") closed its previously announced
notes offering (the "Offering") of $535 million aggregate principal amount of
its 3.625% senior notes due 2031 (the "Notes"). The Notes are unsubordinated
unsecured obligations of Valvoline and are guaranteed on an unsubordinated
unsecured basis by each of Valvoline's subsidiaries that guarantees Valvoline's
obligations under its existing senior secured credit facilities (the "Subsidiary
Guarantors"). Valvoline intends to use the net proceeds from this Offering,
together with cash and cash equivalents on hand, to fund the redemption of all
of its outstanding 4.375% Senior Notes due 2025 (the "2025 Notes") at an
aggregate redemption price of approximately $840 million (which includes an
estimated redemption premium of approximately $26 million and unpaid accrued
interest of approximately $14 million) and to pay related fees and expenses.
The Notes have not been and will not be registered under the Securities Act of
1933, as amended (the "Securities Act"), and may not be offered or sold in the
United States absent registration or an applicable exemption from registration
requirements. The Notes will be offered and sold only to qualified institutional
buyers pursuant to Rule 144A under the Securities Act, and to non-U.S. persons
outside the United States pursuant to Regulation S under the Securities Act.
The Notes were issued under the indenture dated as of January 4, 2021 (the
"Indenture"), among Valvoline, the Subsidiary Guarantors and U.S. Bank National
Association, as trustee. The Indenture contains customary events of default for
similar debt securities, which if triggered may accelerate payment of principal,
premium, if any, and accrued but unpaid interest on the Notes. Such events of
default include non-payment of principal and interest, non-performance of
covenants and obligations, default on other material debt, and bankruptcy or
insolvency. If a change of control repurchase event as described in the
Indenture occurs, Valvoline may be required to offer to purchase the Notes from
the holders thereof. The Notes will mature on June 15, 2031. The Notes issued
under the Indenture may be redeemed at the option of Valvoline at any time prior
to their maturity in the manner specified in the Indenture.
U.S. Bank National Association also serves as trustee under the indenture
governing Valvoline's existing 2025 Notes and the indenture governing
Valvoline's existing 4.250% Senior Notes due 2030 and as a lender under
Valvoline's existing senior secured credit facilities. Additionally, an
affiliate of U.S. Bank National Association acted as an initial purchaser in
this Offering.
This Current Report on Form 8-K shall not be considered to be a notice of
redemption pursuant to the indenture governing Valvoline's existing 2025 Notes.
The Indenture is filed as Exhibit 4.1 to this Form 8-K and is incorporated
herein by reference. The descriptions of the materials terms of the Indenture
and the Notes are qualified in their entirety by reference to this exhibit.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of a Registrant.
The disclosure required by this Item is included in Item 1.01 and is
incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Description
4.1 Indenture dated as of January 4, 2021, among Valvoline Inc., the
guarantors thereto and U.S. Bank National Association, as Trustee.
104 Cover Page Interactive Data File (embedded within Inline XBRL
document).
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