LEAR CORPORATION (NYSE:LEA) Files An 8-K Entry into a Material Definitive AgreementItem 1.01.
Underwriting Agreement
On August14, 2017, Lear Corporation (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with Barclays Capital Inc., Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner& Smith Incorporated, as representatives of the several underwriters (the “Underwriters”), relating to the issuance and sale by the Company of $750 million in aggregate principal amount of 3.800% senior notes due 2027 (the “Notes”). The Notes were issued at 99.294% of par, resulting in a yield to maturity of 3.885%. The Notes were offered and sold to the Company’s automatic shelf registration statement on Form S-3 filed with the Securities and Exchange Commission on August10, 2017 (Registration No.333-219855).
The net proceeds of the offering were $738.5 million, after deducting the underwriting discount and estimated offering expenses. The Company intends to use approximately $521.1 million of the net proceeds of the offering to redeem the outstanding $500.0 million aggregate principal amount of the Company’s 4.75% senior notes due 2023 (the “2023 Notes”) at a price equal to 50% of the principal amount of such 2023 Notes plus accrued and unpaid interest and a “make-whole” premium. The remaining net proceeds will be used to repay amounts outstanding under the Company’s revolving credit facility and for general corporate purposes.
The Underwriting Agreement includes customary representations, warranties and covenants by the Company. It also provides for customary indemnification by the Company and the Underwriters against certain liabilities and customary contribution provisions in respect of those liabilities.
Certain of the Underwriters and their affiliates have engaged in, and may in the future engage in, securities trading, commercial banking, investment banking, investment management, investment research, principal investment, hedging, financing, brokerage and advisory services for the Company from time to time.
The Underwriting Agreement is filed as Exhibit 1.1 hereto and incorporated herein by reference. The above description of the material terms of the Underwriting Agreement is not complete and is qualified in its entirety by reference to Exhibit 1.1.
Indenture
On August17, 2017, the Company completed its offering of the Notes. The Company issued the Notes to an Indenture, dated August17, 2017 (the “Base Indenture”), between the Company and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented by a First Supplemental Indenture, dated August17, 2017 (the “Supplemental Indenture,” and together with the Base Indenture, the “Indenture”), between the Company and the Trustee.
The Indenture provides, among other things, that the Notes will be senior unsecured obligations of the Company. Interest is payable on the Notes on March15 and September15 of each year, beginning March15, 2018. The Notes will mature on September15, 2027.
Prior to June15, 2027, the Company may at its option redeem the Notes, in whole or in part, at a redemption price equal to 50% of the principal amount of the Notes plus the applicable premium, if any, as of, and accrued and unpaid interest to, but not including, the redemption date. On or after June15, 2027, the Company may at its option redeem the Notes, at any time, in whole or in part, on not less than 15 nor more than 60 days’ prior notice, at a redemption price equal to 50% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest on the notes to be redeemed to, but not including, the redemption date.
Subject to certain limitations, in the event of a change of control of the Company and a related ratings decline, the Company will be required to make an offer to repurchase the Notes at a purchase price equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest to, but not including, the purchase date.
The Indenture contains restrictive covenants that, among other things, limit the ability of the Company to create or permit liens and consolidate or merge or sell all or substantially all of the Company’s assets. The foregoing limitations are subject to exceptions as set forth in the Supplemental Indenture.
The Indenture provides for customary events of default that include, among other things (subject in certain cases to customary grace and cure periods): (i)non-payment of principal or interest, (ii)breach of certain covenants contained in the Indenture or the Notes, (iii)failure to pay certain other indebtedness within the applicable grace period or the acceleration of any such indebtedness by the holders thereof because of a default prior to maturity if the total amount of such indebtedness
unpaid or accelerated exceeds $200 million or its foreign currency equivalent and (iv)certain events of bankruptcy or insolvency. Generally, if an event of default occurs (subject to certain exceptions), the Trustee or the holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all of the Notes to be due and payable.
The Base Indenture and the Supplemental Indenture are filed as Exhibits 4.1 and 4.2, respectively, hereto and are incorporated herein by reference. The above description of the material terms of the Indenture is not complete and is qualified in its entirety by reference to Exhibits 4.1 and 4.2.
Section7 — Regulation FD
| Item 1.01. | Regulation FD Disclosure. |
On August14, 2017, the Company issued a press release announcing the pricing of the offering of the Notes, which is attached as Exhibit 99.1 hereto and incorporated herein by reference.
On August17, 2017, the Company issued a press release announcing the completion of its refinancing transactions, including the offering of the Notes, which is attached as Exhibit 99.2 hereto and incorporated herein by reference.
The information contained in this Item 1.01 and Exhibits 99.1 and 99.2 hereto shall not be deemed “filed” for purposes of Section18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Section9 — Financial Statements and Exhibits
| Item 1.01. | Financial Statements and Exhibits |
(d) Exhibits:
|
Exhibit Number |
Exhibit Description |
| 1.1 | Underwriting Agreement, dated August 14, 2017, among the Company and Barclays Capital Inc., Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several underwriters named therein. |
| 4.1 | Indenture, dated August 17, 2017, between the Company and the Trustee. |
| 4.2 | First Supplemental Indenture, dated August 17, 2017, between the Company and the Trustee. |
| 5.1 | Opinion of Winston & Strawn LLP |
| 23.1 | Consent of Winston & Strawn LLP (included in Exhibit 5.1) |
| 99.1 | Press Release, dated August 14, 2017. |
| 99.2 | Press Release, dated August 17, 2017. |
LEAR CORP ExhibitEX-1.1 2 d439066dex11.htm EX-1.1 EX-1.1 Exhibit 1.1 EXECUTION VERSION Lear Corporation 3.800% Senior Notes Due 2027 Underwriting Agreement New York,…To view the full exhibit click here
About LEAR CORPORATION (NYSE:LEA)
Lear Corporation (Lear) is a supplier to the global automotive industry. The Company is engaged in supplying seating, electrical distribution systems and electronic modules, as well as related sub-systems, components and software, to automotive manufacturers. The Company operates through two segments: seating and electrical. The seating segment consists of the design, development, engineering, assembly and delivery of seat systems, as well as the design, development, engineering and manufacture of seat components, including seat covers and surface materials. Its electrical segment consists of the design, development, engineering and manufacture of electrical distribution systems that route electrical signals and manage electrical power within a vehicle. It has over 240 manufacturing, engineering and administrative locations in approximately 40 countries. It has automotive content on over 350 vehicle nameplates across the world.