8-KMaterial AgreementsFinancial EventsExhibits & Filings

ENTEGRIS INC 8-K Report, Material Agreement (Apr 30, 2020)

Filed April 30, 2020For Securities:ENTG

Summary

Entegris, Inc. (ENTG) announced on April 30, 2020, the issuance of $400 million in aggregate principal amount of 4.375% senior unsecured notes due April 15, 2028. This offering provides the company with additional long-term capital, likely to support strategic initiatives, operational growth, or refinancing existing debt. The notes are guaranteed by certain domestic subsidiaries, but they are effectively subordinated to the company's secured debt. Investors should note the optional redemption features. Prior to April 15, 2023, Entegris can redeem up to 40% of the notes using equity offering proceeds at a premium (104.375%). The company also has the option to redeem the notes at any time prior to April 15, 2023, with a "make whole" premium, or on or after April 15, 2023, at progressively lower redemption prices, starting at 102.188% in 2023 and decreasing to 100% in 2025. A change of control event coupled with a ratings downgrade triggers a mandatory repurchase offer at 101% of the principal amount.

Key Highlights

  • 1Entegris issued $400 million of 4.375% senior unsecured notes due in 2028.
  • 2The notes are guaranteed by certain domestic subsidiaries.
  • 3The 2028 Notes rank senior to subordinated debt but are effectively subordinated to secured debt.
  • 4The company can redeem up to 40% of the notes before April 15, 2023, using equity proceeds at a 104.375% premium.
  • 5Entegris has "make-whole" redemption options before April 15, 2023, and scheduled redemption at declining premiums thereafter.
  • 6A change of control event with specific rating triggers requires the company to offer to repurchase the notes at 101% of par.
  • 7Covenants restrict the incurrence of liens, sale and leaseback transactions, and mergers/asset sales, and limit indebtedness for non-guarantor subsidiaries.

Frequently Asked Questions

While the filing doesn't explicitly state the purpose, the issuance of $400 million in long-term debt typically aims to provide capital for general corporate purposes, which can include funding growth initiatives, capital expenditures, strategic acquisitions, or refinancing existing debt obligations.

The 2028 Notes are senior unsecured obligations. This means they rank equally in right of payment with other existing and future senior unsecured debt, including the company's 2026 Notes. However, they are effectively subordinated to all secured indebtedness, meaning that in the event of bankruptcy or liquidation, holders of secured debt would have a prior claim on the assets securing that debt.

Entegris has flexibility regarding early redemption. They can redeem up to 40% of the notes before April 15, 2023, using net proceeds from an equity offering, at a price of 104.375% of the principal amount. Additionally, they can redeem the notes in whole or in part at any time before April 15, 2023, at a price including a 'make-whole' premium. After April 15, 2023, redemptions can occur at scheduled percentages starting at 102.188% in 2023 and decreasing to 100% by 2025.

If a change of control event occurs, and it is accompanied by certain rating events (specifically, a downgrade by Moody's or S&P), Entegris is obligated to offer to repurchase all outstanding 2028 Notes at a price of 101% of the principal amount, plus accrued interest.