8-KMaterial AgreementsFinancial EventsExhibits & Filings

ENTEGRIS INC 8-K Report, Material Agreement (Apr 2, 2014)

Filed April 2, 2014For Securities:ENTG

Summary

Entegris, Inc. (ENTG) filed an 8-K on April 2, 2014, to report the issuance of $360 million in aggregate principal amount of 6.00% senior unsecured notes due April 1, 2022. These notes are guaranteed by certain subsidiaries and rank pari passu with other senior unsecured indebtedness, but are effectively subordinated to secured debt. The issuance of these notes represents a significant financing event for Entegris. The company has the option to redeem the notes at various times and prices, with call protection in place until April 1, 2017. Notably, a change of control event triggers an obligation for the company to repurchase the notes at a premium. The indenture also includes covenants that restrict the company and its subsidiaries from engaging in certain activities, such as paying dividends, incurring additional debt, or disposing of substantially all assets without meeting specific conditions or making offers to repurchase these notes.

Key Highlights

  • 1Entegris issued $360 million in 6.00% Senior Unsecured Notes due 2022.
  • 2The notes are guaranteed by certain subsidiaries, providing a degree of credit enhancement.
  • 3The new notes rank pari passu with existing senior unsecured debt but are effectively subordinated to secured debt.
  • 4The company has optional redemption features, including a make-whole premium before April 1, 2017, and declining premiums thereafter.
  • 5A change of control event requires Entegris to offer to repurchase the notes at 101% of their principal amount.
  • 6The indenture contains covenants that restrict dividends, additional debt, asset sales, and other significant corporate actions.
  • 7The proceeds from asset sales must be reinvested, used to prepay secured debt, or offered to purchase these notes.

Frequently Asked Questions

The primary purpose of this 8-K filing is to disclose Entegris, Inc.'s entry into a material definitive agreement regarding the issuance of $360 million in 6.00% Senior Unsecured Notes due 2022.

The 2022 Senior Unsecured Notes rank as senior unsecured obligations and are pari passu (equal in priority) with other existing and future senior unsecured debt. However, they are effectively subordinated to all secured indebtedness of Entegris and its guarantors, as the value of the assets securing such debt would be paid out first in a liquidation scenario.

Bondholders are protected by several features including optional redemption provisions for the company (with call protection and declining redemption prices), a mandatory purchase offer at 101% of principal in case of a change of control, and restrictions on asset sales that may require proceeds to be used to repurchase these notes. The indenture also includes covenants limiting the company's ability to incur additional debt, pay dividends, or dispose of significant assets.

Yes, Entegris has the option to redeem the notes. Prior to April 1, 2017, redemption can occur at 100% of the principal plus a make-whole premium. On and after April 1, 2017, the redemption price starts at 104.5% of principal and decreases annually until it reaches 100% in 2020 and thereafter. Additionally, up to 40% of the notes can be redeemed at 106% of principal using net cash proceeds from equity offerings before April 1, 2017.