8-KMaterial AgreementsFinancial EventsOther Events+1

ENTEGRIS INC 8-K Report, Material Agreement (Apr 30, 2021)

Filed April 30, 2021For Securities:ENTG

Summary

Entegris, Inc. (ENTG) has announced the issuance of $400 million in aggregate principal amount of 3.625% senior unsecured notes due May 1, 2029. These notes are guaranteed by certain domestic subsidiaries and rank as senior unsecured obligations, on par with existing senior indebtedness but subordinate to secured debt. The issuance of these new notes will facilitate the redemption of the Company's 4.625% senior unsecured notes due 2026, with an aggregate principal amount of $550 million, expected to occur on May 4, 2021, at a redemption price of approximately $575 million. This refinancing activity indicates a proactive approach by Entegris to manage its debt structure and potentially lower its overall interest expense. The Company has already deposited sufficient funds for the redemption of the 2026 notes, effectively satisfying and discharging its obligations related to them as of April 30, 2021. Investors should monitor the impact of this debt restructuring on the company's leverage ratios and cash flow.

Key Highlights

  • 1Entegris issued $400 million of 3.625% senior unsecured notes due 2029.
  • 2The proceeds from the new notes will be used to redeem $550 million of 4.625% senior unsecured notes due 2026.
  • 3The redemption of the 2026 notes is scheduled for May 4, 2021, with an expected cost of approximately $575 million.
  • 4Entegris has satisfied and discharged its obligations related to the 2026 notes as of April 30, 2021, by depositing sufficient funds for redemption.
  • 5The new 2029 notes are guaranteed by certain domestic subsidiaries and are senior unsecured obligations.
  • 6The 2029 notes are effectively subordinated to any secured indebtedness of Entegris and its guarantors.
  • 7The indenture for the 2029 notes includes covenants that limit the Company's ability to incur liens, engage in sale-and-leaseback transactions, and consolidate or merge.

Frequently Asked Questions

The primary purpose of issuing the $400 million in 3.625% senior unsecured notes due 2029 is to fund the redemption of the Company's outstanding 4.625% senior unsecured notes due 2026. This represents a debt refinancing strategy.

The redemption of the $550 million aggregate principal amount of 4.625% senior unsecured notes due 2026 is expected to cost approximately $575 million. This includes the principal amount plus a redemption premium and accrued interest.

The 2029 Notes are senior unsecured obligations. They rank equally in right of payment with other existing and future senior unsecured indebtedness of Entegris and its guarantors. However, they are effectively subordinated to all secured indebtedness of the Company and its guarantors, to the extent of the value of the collateral securing such debt.

Yes, the indenture governing the 2029 Notes contains covenants that restrict Entegris and its subsidiaries from, among other things, incurring liens, engaging in sale-and-leaseback transactions, and consolidating, merging, or transferring substantially all of their assets. It also limits the ability of non-guarantor subsidiaries to incur indebtedness.