8-KFinancial EventsOther EventsExhibits & Filings

ECOLAB INC. 8-K Report, Financial Obligation (Oct 18, 2016)

Filed October 18, 2016For Securities:ECL

Summary

Ecolab Inc. (ECL) announced on October 13, 2016, the completion of a $1 billion senior unsecured note offering on October 18, 2016. The offering consisted of $750 million in 2.700% Notes due 2026 and $250 million in 3.700% Notes due 2046. The company utilized the net proceeds of approximately $987.5 million primarily to repay commercial paper borrowings, which were used for general corporate and working capital purposes. Additionally, the proceeds will help in repaying the company's 3.000% senior notes due 2016 at maturity. This debt issuance strengthens Ecolab's capital structure by replacing short-term commercial paper with longer-term debt and addressing an upcoming maturity. The new notes are senior unsecured and unsubordinated obligations, ranking equally with other senior indebtedness. The indenture includes provisions for change of control repurchase events and customary covenants and events of default, providing a framework for debt management and creditor protection.

Key Highlights

  • 1Completed a $1 billion senior unsecured note offering on October 18, 2016.
  • 2The offering included $750 million of 2.700% Notes due 2026 and $250 million of 3.700% Notes due 2046.
  • 3Net proceeds of approximately $987.5 million will be used to repay commercial paper borrowings and upcoming 3.000% senior notes due 2016.
  • 4The new notes are senior unsecured and unsubordinated obligations.
  • 5The indenture includes covenants that limit certain company actions, such as incurring liens or engaging in sale and leaseback transactions.
  • 6A change of control provision is included, requiring a repurchase offer if specific downgrade conditions are met.
  • 7The offering was made under Ecolab's effective automatic shelf registration statement on Form S-3.

Frequently Asked Questions

The primary purpose was to repay commercial paper borrowings, which were used for general corporate and working capital purposes, and to fund the repayment of Ecolab's 3.000% senior notes due in 2016 at maturity. This effectively extends the company's debt maturity profile.

Ecolab issued $750 million of 2.700% Notes due November 1, 2026, and $250 million of 3.700% Notes due November 1, 2046. Both note series bear interest payable semi-annually starting May 1, 2017, and are redeemable at the company's option.

No, the notes are senior unsecured and unsubordinated obligations of Ecolab Inc. They rank equally with all other senior and unsubordinated indebtedness of the company.

Noteholders are protected by a change of control provision that requires Ecolab to offer to repurchase the notes (at 101% of principal plus interest) if a change of control occurs and the notes are downgraded below investment grade by both Moody's and S&P. The indenture also contains covenants limiting the company's ability to incur certain liens or engage in specific transactions, and outlines customary events of default.