LSB INDUSTRIES, INC. (NYSE:LXU) 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
Sale of Additional Senior Secured Notes due 2023
On June 21, 2019, LSB Industries, Inc. (the Company) completed its previously announced issuance and sale of $35 million aggregate principal amount of its 9.625% Senior Secured Notes due 2023 (the New Notes). The New Notes constitute a further issuance of the 9.625% Senior Secured Notes due 2023, of which $400 million aggregate principal amount was issued on April 25, 2018 (such previously issued notes together with the New Notes, the Notes). The New Notes were issued to an indenture, dated as of April 25, 2018 (the Indenture), by and among the Company, the subsidiary guarantors named therein, and Wilmington Trust, National Association, a national banking association, as trustee and collateral agent (the Notes Trustee). The New Notes were issued at a price equal to 102.125% of their face value, plus accrued interest from May 1, 2019 to June 21, 2019, in a transaction exempt from the registration requirements under the Securities Act of 1933 (the Securities Act) and will be resold to eligible purchasers in reliance on Rule 144A under the Securities Act and to non-U.S. persons in accordance with Regulation S under the Securities Act. The Notes will mature on May 1, 2023 and rank senior in right of payment to all of the Companys debt that is expressly subordinated in right of payment to the Notes, and will rank pari passu in right of payment with all of the Companys liabilities that are not so subordinated, including the Companys revolving credit facility. The Companys obligations under the Notes are jointly and severally guaranteed by the subsidiary guarantors named in the Indenture on a senior secured basis.
Interest on the Notes accrues at a rate of 9.625% per annum and is payable semi-annually in arrears on May 1 and November 1 of each year to the holders of record on the immediately preceding April 15 and October 15. Interest on the New Notes accrues from May 1, 2019.
The Indenture provides for customary events of default (subject in certain cases to customary grace and cure periods), which include nonpayment, breach of covenants in the Indenture, payment defaults or acceleration of other indebtedness, a failure to pay certain judgments and certain events of bankruptcy and insolvency. Generally, if an event of default occurs and is continuing, the Notes Trustee or holders of at least 25% in principal amount of the then outstanding Notes may declare the principal of and accrued but unpaid interest on all the Notes to be due and payable.
The foregoing description of the Indenture is not intended to be complete and is qualified in its entirety by reference to the complete text of the Indenture (including the forms of the Notes and the form of Guarantee Agreement included therein), which is incorporated herein by reference.
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