ECOLAB INC. (NYSE:ECL) Files An 8-K Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a RegistrantItem 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 August7, 2017, Ecolab Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with Merrill Lynch, Pierce, Fenner& Smith Incorporated, Credit Suisse Securities (USA) LLC and Wells Fargo Securities, LLC, as Representatives of the several Underwriters (the “Underwriters”), to which the Company agreed to issue and sell to the Underwriters $500,000,000 aggregate principal amount of its 2.375% Notes due 2022 (the “Notes”). The Underwriting Agreement contains customary representations, warranties and covenants made by the Company. It also provides for customary indemnification by each of the Company and the Underwriters against certain liabilities and customary contribution provisions in respect of those liabilities.
On August10, 2017, the Company completed the offering, and the Notes were issued to an Indenture (the “Base Indenture”), dated January12, 2015, between the Company and Wells Fargo Bank, National Association, as trustee (the “Trustee”), as amended by the Sixth Supplemental Indenture, dated August10, 2017 (the “Sixth Supplemental Indenture” and together with the Base Indenture, the “Indenture”), between the Company and the Trustee.
The Notes bear interest at a rate of 2.375% per annum, payable semiannually in arrears on February10 and August10 of each year, beginning on February10, 2018. The Notes will mature on August10, 2022 and are redeemable at the Company’s 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 Moody’s Investors Service,Inc. and S&P 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 public offering price of the Notes was 99.948% of the principal amount of the Notes. The Company received net proceeds (after deducting underwriting discounts and the Company’s offering expenses) of approximately $495.6 million and intends to use such net proceeds to repay a portion of its commercial paper borrowings.
The Notes were offered and sold to the Company’s 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 August7, 2017, together with the accompanying prospectus, dated January12, 2015, relating to the offering and sale of the Notes.
The Underwriters and their affiliates have performed from time to time, and may in the future perform, various investment banking, commercial lending, financial advisory and other services for the Company for which they received or will receive customary fees and expenses. An affiliate of the Trustee acted as an Underwriter in connection with the issuance of the Notes.
The above description of the Underwriting Agreement, the Base Indenture, the Sixth Supplemental Indenture and the form of Notes is qualified in its entirety by reference to the Underwriting Agreement, the Base
