8-K

CRH PUBLIC LTD CO 8-K Report (Mar 27, 2018)

Filed March 27, 2018For Securities:CRH

Summary

CRH Public Limited Company (CRH) has announced through its wholly-owned subsidiary, CRH America, Inc., the full redemption of its outstanding 8.125% Guaranteed Notes due 2018. The principal amount of these notes is $287,870,000, and the redemption is scheduled for April 27, 2018. This action is an exercise of CRH America's option under the terms of the notes and the governing indenture. The redemption will occur at a 'make-whole' price, which is determined by the greater of 100% of the principal amount or the present value of remaining payments discounted at the Treasury Rate plus 50 basis points, plus any accrued and unpaid interest. Investors holding these notes should consult the official notice of redemption for precise details on the redemption price and procedures for surrendering their notes. This proactive bond management suggests CRH is optimizing its capital structure and potentially reducing interest expenses.

Key Highlights

  • 1CRH America, Inc. is redeeming its 8.125% Guaranteed Notes due 2018 in full.
  • 2The aggregate principal amount of the notes to be redeemed is $287,870,000.
  • 3The redemption date is set for April 27, 2018.
  • 4The redemption will be at a 'make-whole' price, which is the greater of 100% of the principal or a calculated present value plus accrued interest.
  • 5The 'make-whole' calculation involves the Treasury Rate plus 50 basis points.
  • 6The redemption is pursuant to the terms of the notes and the Indenture dated March 20, 2002.
  • 7The Bank of New York Mellon is acting as the successor trustee and paying agent.

Frequently Asked Questions

The filing states that CRH America, Inc. is exercising its option to redeem the notes in full. While the specific strategic reason is not detailed, companies typically redeem bonds early to take advantage of lower interest rates, refinance debt on more favorable terms, or simplify their capital structure.

The redemption price will be the greater of (i) 100% of the principal amount of the notes or (ii) the sum of the present values of the remaining scheduled payments discounted at the Treasury Rate plus 50 basis points, along with any accrued and unpaid interest up to the redemption date. The Treasury Rate is determined on the third business day before the redemption date.

Bondholders should refer to the official notice of redemption being sent by the Trustee (The Bank of New York Mellon) for specific instructions on how to surrender their 2018 Notes to receive the redemption price and any accrued interest. The notice will provide details on the payment and the required documentation.

This redemption indicates CRH is actively managing its debt obligations. If CRH can refinance at a lower interest rate, it would reduce future interest expenses and potentially improve profitability. The 'make-whole' provision suggests CRH is willing to pay a premium to retire this debt, which could be indicative of favorable market conditions or a strategic financial move.