8-KFinancial EventsExhibits & Filings

CHURCH & DWIGHT CO INC /DE/ 8-K Report, Financial Obligation (Jul 25, 2017)

Filed July 25, 2017For Securities:CHD

Summary

On July 25, 2017, Church & Dwight Co., Inc. (CHD) filed an 8-K report detailing a significant debt issuance totaling $1.425 billion to fund the acquisition of Water Pik, Inc. The issuance comprises $300 million in Floating Rate Senior Notes due 2019, $300 million in 2.450% Senior Notes due 2022, $425 million in 3.150% Senior Notes due 2027, and $400 million in 3.950% Senior Notes due 2047. This financing strategy aims to integrate Water Pik, repay existing debt including a $200 million term loan and commercial paper borrowings. Investors should note the potential for a special mandatory redemption of a significant portion of these notes if the Water Pik acquisition does not close by October 16, 2017, with a 101% redemption price, indicating a contingency for deal failure. The notes are senior unsecured obligations, ranking equally with other senior unsecured debt but subordinated to secured debt and structurally subordinated to subsidiary obligations.

Key Highlights

  • 1Church & Dwight issued $1.425 billion in senior notes across four tranches (Floating Rate 2019, Fixed Rate 2022, 2027, and 2047).
  • 2The primary purpose of the debt issuance is to finance the acquisition of Water Pik, Inc. and associated expenses.
  • 3The proceeds will also be used to repay a $200 million term loan and a portion of commercial paper borrowings.
  • 4A 'Special Mandatory Redemption' clause exists for Floating Rate 2019, Fixed Rate 2022, and 2047 notes if the Water Pik acquisition fails to close by October 16, 2017, requiring redemption at 101% of principal.
  • 5The notes are senior unsecured obligations, pari passu with existing senior unsecured debt.
  • 6The notes are effectively subordinated to secured debt and structurally subordinated to subsidiary debt.
  • 7The company retains the option to redeem Fixed Rate Notes prior to maturity under specific conditions, including at par on or after 'Par Call Dates'.

Frequently Asked Questions

The primary reason for this $1.425 billion debt issuance is to fund the acquisition of Water Pik, Inc., along with related fees and expenses.

The notes include $300 million in Floating Rate Senior Notes due 2019, $300 million in 2.450% Senior Notes due 2022, $425 million in 3.150% Senior Notes due 2027, and $400 million in 3.950% Senior Notes due 2047.

If the Water Pik acquisition is not completed by October 16, 2017, Church & Dwight will be required to perform a 'Special Mandatory Redemption' of the Floating Rate Notes due 2019, the 2022 Notes, and the 2047 Notes at a redemption price of 101% of the principal amount, plus accrued interest.

These notes are senior unsecured obligations, ranking equally with the company's other senior unsecured debt. They are effectively subordinated to any secured debt and structurally subordinated to the obligations of the company's subsidiaries.