ECOLAB INC. (NASDAQ:ECL) Files An 8-K Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
The information set forth in Item 8.01 below with respect to the
Notes and the Indenture (each as defined below) is hereby
incorporated by reference into this Item 2.03, insofar as it
relates to the creation of a direct financial obligation.
Item 8.01 Other Events.
On December1, 2016, Ecolab Inc. (the Company) entered into an
underwriting agreement (the Underwriting Agreement) with J.P.
Morgan Securities plc, Merrill Lynch International, MUFG
Securities EMEA plc, Citigroup Global Markets Limited, Mizuho
International plc and UniCredit Bank AG (the Underwriters), to
which the Company agreed to issue and sell to the Underwriters
575,000,000 aggregate principal amount of its 1.000% Euro Notes
due 2024 (the Notes). On December8, 2016, the Company completed
the offering, and the Notes were issued to an Indenture (the Base
Indenture), dated January12, 2015, by and between the Company and
Wells Fargo Bank, National Association, as trustee (the Trustee),
as amended by the Fifth Supplemental Indenture, dated December8,
2016 (the Fifth Supplemental Indenture, and together with the
Base Indenture, the Indenture), by and among the Company, the
Trustee, Elavon Financial Services DAC, UK Branch, as paying
agent, and Elavon Financial Services DAC, as transfer agent and
registrar.
The Notes bear interest at a rate of 1.000% per annum, payable
annually in arrears on January15 each year, beginning on
January15, 2018. The Notes will mature on January15, 2024 and are
redeemable at the Companys option in whole at any time or in part
from time to time, at the redemption prices specified in the
Indenture.
Under the Indenture, specified changes of control involving the
Company, when accompanied by a downgrade of the Notes below
investment grade rating by both Moodys Investors ServiceInc. and
SP Global Ratings within a specified time period, constitute
change of control repurchase events. Upon the occurrence of a
change of control repurchase event with respect to the Notes,
unless the Company has exercised its option to redeem the Notes,
it will be required to offer to repurchase the Notes at a price
equal to 101% of the aggregate principal amount thereof, plus any
accrued and unpaid interest to the date of repurchase.
The Indenture contains covenants that limit, among other things,
the ability of the Company and its subsidiaries to incur liens on
certain properties to secure debt, to engage in sale and
leaseback transactions and to transfer certain property, stock or
debt of any restricted subsidiary to any unrestricted subsidiary
(each as defined in the Indenture). The Indenture also provides
for customary events of default, which include (subject in
certain cases to a customary grace and cure periods), among
others, nonpayment of principal or interest on the Notes; failure
to comply with certain other covenants or agreements under the
Indenture; and specified events of bankruptcy or insolvency. In
the case of an event of default, the trustee or the holders of at
least 25% in principal amount of the Notes then outstanding may
declare all of the Notes to be due and payable immediately.
The Notes are senior unsecured and unsubordinated obligations of
the Company and rank equally with all other senior and
unsubordinated indebtedness of the Company from time to time
outstanding.
The public offering price of the Notes was 99.191% of the
principal amount of the Notes. The Company received net proceeds
(after deducting underwriting discounts and the Companys offering
expenses) of approximately $600.4 million and intends to use such
net proceeds to repay a portion of its 3.000% senior notes due
2016 at maturity and its 4.585% SeriesB senior euro notes due
2016 at maturity and for general corporate purposes.
The Notes were offered and sold to the Companys automatic shelf
registration statement on FormS-3 (Registration No.333-201445)
under the Securities Act of 1933, as amended, which was filed and
became effective on January12, 2015. The Company has filed with
the Securities and Exchange Commission a prospectus supplement,
dated December1, 2016, together with the accompanying prospectus,
dated January12, 2015, relating to the offering and sale of the
Notes.
The above description of the Underwriting Agreement, the Base
Indenture, the Fifth Supplemental Indenture and the Notes is
qualified in its entirety by reference to the Underwriting
Agreement, the Base Indenture, the Fifth Supplemental Indenture
and the form of Notes, each of which is incorporated herein by
reference and are attached to this Current Report on Form8-K as
Exhibits 1.1, 4.1, 4.2 and 4.3, respectively.
Some of the Underwriters and their affiliates have engaged in,
and may in the future engage in, investment banking, commercial
banking and other commercial dealings in the ordinary course of
business with the Company or its affiliates. They have
received, or may in the future receive, customary fees and
commissions for these transactions. In particular, certain of
the Underwriters or their affiliates are agents and/or lenders
on the Companys multicurrency revolving credit facility, for
which they received customary compensation. Affiliates of
Merrill Lynch International act as the administrative agent and
a joint lead arranger and lender under the Companys
multicurrency revolving credit facility. Affiliates of J.P.
Morgan Securities plc and MUFG Securities EMEA plc act as
co-syndication agents and joint lead arrangers under the
Companys multicurrency revolving credit facility.
In addition, in the ordinary course of their business
activities, the Underwriters and their affiliates may make or
hold a broad array of investments, including serving as
counterparties to certain derivative and hedging arrangements,
and may actively trade debt and equity securities (or related
derivative securities) and financial instruments (including
bank loans) for their own account and for the accounts of their
customers. Such investments and securities activities may
involve securities and/or instruments of the Company or its
affiliates. Certain of the Underwriters or their affiliates
that have a lending relationship with the Company routinely
hedge their credit exposure to the Company consistent with
their customary risk management policies. Typically, such
Underwriters and their affiliates would hedge such exposure by
entering into transactions which consist of either the purchase
of credit default swaps or the creation of short positions in
the Companys securities, including potentially the Notes. Any
such credit default swaps or short positions could adversely
affect future trading prices of the Notes. The Underwriters and
their affiliates may also make investment recommendations
and/or publish or express independent research views in respect
of such securities or financial instruments and may hold, or
recommend to clients that they acquire, long and/or short
positions in such securities and instruments.
In connection with the issuance of the Notes to the
registration statement on FormS-3 (File No.333-201445), filed
on January12, 2015, the Company is filing a legal opinion as
Exhibit5.1 to this Current Report on Form8-K.
Item 9.01 Financial Statements and
Exhibits.
(d) Exhibits.
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ExhibitNumber |
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Description |
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Exhibit1.1 |
Underwriting Agreement, dated December1, 2016, by and |
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Exhibit4.1 |
Indenture, dated January12, 2015, by and between the |
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|
Exhibit4.2 |
Fifth Supplemental Indenture, dated December8, 2016, by |
|
|
Exhibit4.3 |
Formof 1.000% Euro Notes due 2024 (included in Exhibit4.2 |
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|
Exhibit5.1 |
Opinion of Skadden, Arps, Slate, Meagher Flom LLP, dated |
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|
Exhibit12 |
Statement regarding computation of ratio of earnings to |
|
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Exhibit23.1 |
Consent of Skadden, Arps, Slate, Meagher Flom LLP |
About ECOLAB INC. (NASDAQ:ECL)
