8-KFinancial EventsOther EventsExhibits & Filings

Baker Hughes Co 8-K Report, Financial Obligation (May 1, 2020)

Filed May 1, 2020For Securities:BKR

Summary

Baker Hughes Co (BKR) filed an 8-K on May 1, 2020, to report the closing of a $500 million offering of 4.486% Senior Notes due May 1, 2030. This offering was conducted by its subsidiaries, Baker Hughes Holdings LLC and Baker Hughes Co-Obligor, Inc. The proceeds from this issuance will likely be used for general corporate purposes, providing the company with additional liquidity and flexibility. Investors should note the specific terms of the notes, including their interest rate, maturity date, and redemption provisions. The filing also incorporates by reference the terms of the underwriting agreement and the fifth supplemental indenture, which contains covenants and restrictions. These include limitations on the ability of the issuers and their subsidiaries to incur liens and engage in sale and leaseback transactions, as well as restrictions on consolidation, merger, or transfer of assets. These covenants are important for understanding the company's financial flexibility and its obligations to noteholders.

Key Highlights

  • 1Baker Hughes Holdings LLC and Baker Hughes Co-Obligor, Inc. closed a $500 million offering of 4.486% Senior Notes due 2030.
  • 2The notes mature on May 1, 2030, and bear an annual interest rate of 4.486%.
  • 3Interest payments are scheduled semi-annually, on May 1 and November 1, starting November 1, 2020.
  • 4The company has the option to redeem the notes, in whole or in part, at a 'make-whole' price before February 1, 2030.
  • 5After February 1, 2030, the company can redeem the notes at 100% of the principal amount.
  • 6The indenture includes covenants that restrict the company and its subsidiaries from incurring liens and engaging in sale and leaseback transactions.
  • 7The indenture also imposes restrictions on consolidation, merger, or transfer of substantially all of the company's assets.

Frequently Asked Questions

The primary purpose of this 8-K filing was to announce and provide details regarding the closing of a $500 million offering of Senior Notes due 2030 by Baker Hughes' subsidiaries. It also disclosed related financial obligations and covenants.

The Senior Notes have an aggregate principal amount of $500 million, bear an interest rate of 4.486% per annum, and mature on May 1, 2030. Interest is payable semi-annually on May 1 and November 1, with the first payment due on November 1, 2020.

The indenture governing the notes includes covenants that restrict Baker Hughes and its subsidiaries from incurring new liens, entering into sale and leaseback transactions, and consolidating, merging, or transferring all or substantially all of their assets. These restrictions are designed to protect the noteholders.

The 'make-whole' redemption provision allows Baker Hughes to redeem the notes prior to February 1, 2030, by paying a price that compensates noteholders for the remaining interest they would have received if the notes matured. This provides flexibility to the company to refinance debt if market conditions become favorable.