Tennant Company (NYSE:TNC) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement.
Issuance of 5.625% Senior Notes due 2025
On April 18, 2017, Tennant Company (the “Company”) issued and sold $300,000,000 in aggregate principal amount of its 5.625% Senior Notes due 2025 (the “Notes”), to an Indenture, dated as of April 18, 2017 (the “Indenture”), among the Company, the Guarantors (as defined therein), and Wells Fargo Bank, National Association, a national banking association, as trustee. The Notes are guaranteed by Tennant Coatings, Inc. and Tennant Sales and Service Company (collectively, the “Guarantors”), which are wholly owned subsidiaries of the Company. The Notes were sold to a Purchase Agreement, dated April 12, 2017, among the Company, the Guarantors and Goldman, Sachs & Co. and J.P. Morgan Securities LLC, as representatives of the several purchasers named therein.
The Notes will mature on May 1, 2025. Interest on the Notes will accrue at the rate of 5.625% per annum and will be payable semiannually in cash on each May 1 and November 1, commencing on November 1, 2017.
The Notes and the guarantees will constitute senior unsecured obligations of the Company and the Guarantors, respectively. The Notes and the guarantees, respectively, will be: (a) equal in right of payment with all of the Company’s and the Guarantors’ senior debt, without giving effect to collateral arrangements; (b) senior in right of payment to all of the Company’s and the Guarantors’ future subordinated debt, if any; (c) effectively subordinated in right of payment to all of the Company’s and the Guarantors’ debt and obligations that are secured, including borrowings under the Company’s senior secured credit facilities for so long as the senior secured credit facilities are secured, to the extent of the value of the assets securing such liens; and (d) structurally subordinated in right of payment to all liabilities (including trade payables) of the Company’s and the Guarantors’ subsidiaries that do not guarantee the Notes.
On or after May 1, 2020, the Company may redeem the Notes, in whole or in part, at any time and from time to time at specified redemption prices, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, the Company may redeem up to 35% of the aggregate principal amount of the Notes at any time and from time to time before May 1, 2020, with an amount up to the net proceeds of certain equity offerings at a redemption price of 105.625% of the principal amount plus accrued and unpaid interest, if any, to, but excluding, the redemption date. The Company may also redeem the Notes, in whole or in part, at any time and from time to time before May 1, 2020 at a redemption price of 50% of the principal amount plus accrued and unpaid interest, if any, to, but excluding, the redemption date, plus a ‘‘make-whole’’ premium.
If the Company experiences certain kinds of changes of control, it may be required to repurchase the Notes at a price equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase. If the Company makes certain asset sales and does not use the net proceeds for specified purposes, it may be required to offer to repurchase the Notes at a price equal to 50% of the principal amount, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase.
The Indenture governing the Notes contains covenants that limit, among other things, the Company’s and its restricted subsidiaries’ ability to: (a) incur additional indebtedness (including guarantees thereof); (b) incur or create liens on their assets securing indebtedness; (c) make certain