8-KFinancial Events

ECOLAB INC. 8-K Report, Financial Obligation (Dec 20, 2006)

Filed December 20, 2006For Securities:ECL

Summary

Ecolab Inc. (ECL) filed an 8-K on December 19, 2006, reporting on the issuance of €300,000,000 in senior notes through a private placement. This issuance was conducted under a previously disclosed Note Purchase Agreement dated July 26, 2006. The notes are divided into two series: €125,000,000 in 4.355% Series A Senior Notes due 2013 and €175,000,000 in 4.585% Series B Senior Notes due 2016. This financing activity indicates Ecolab's strategy to secure long-term debt at specific interest rates, likely for general corporate purposes or strategic initiatives. Investors should note the maturity dates and interest rates of these notes, as well as the conditions under which prepayment or acceleration could occur, particularly in the event of a merger or default. The private placement nature of this issuance suggests it was exempt from standard registration requirements, which is common for institutional debt offerings.

Key Highlights

  • 1Ecolab Inc. issued €300,000,000 in senior notes via a private placement on December 14, 2006.
  • 2The issuance is comprised of two tranches: €125,000,000 of 4.355% Series A Senior Notes due 2013.
  • 3The second tranche consists of €175,000,000 of 4.585% Series B Senior Notes due 2016.
  • 4Interest payments for both series are annual, due on December 14, starting December 14, 2007.
  • 5The notes are generally not subject to prepayment, except in specific circumstances such as a consolidation or merger of substantially all of the Company's assets.
  • 6In the event of default, the notes may become immediately due and payable, including principal, accrued interest, and a make-whole amount.
  • 7The issuance was made pursuant to a Note Purchase Agreement previously disclosed in a July 26, 2006 8-K filing.

Frequently Asked Questions

While the 8-K filing does not explicitly state the precise use of proceeds, such debt issuances are typically used for general corporate purposes, to fund strategic initiatives, acquisitions, or to refinance existing debt. The company is securing long-term capital at fixed interest rates.

The Series A notes total €125,000,000, bear an annual interest rate of 4.355%, and mature on December 14, 2013. The Series B notes total €175,000,000, bear an annual interest rate of 4.585%, and mature on December 14, 2016. Interest payments for both are annual, starting in December 2007.

The notes are not generally prepayable. However, Ecolab is obligated to offer to prepay all notes at 100% of principal plus accrued interest if it consolidates or merges substantially all of its assets with another entity. In case of a default under the Note Purchase Agreement, the notes could become immediately due and payable, including a make-whole amount.

Private placements are exempt from SEC registration requirements under the Securities Act of 1933. This method is often used for debt offerings to institutional investors, allowing for quicker execution and potentially more tailored terms compared to public offerings.