8-KMaterial AgreementsFinancial EventsRegulation FD+1

TechnipFMC plc 8-K Report, Material Agreement (Jan 29, 2021)

Filed January 29, 2021For Securities:FTI

Summary

TechnipFMC plc (FTI) has filed an 8-K report detailing the successful completion of a $1 billion offering of 6.500% senior notes due 2026. The net proceeds, approximately $985 million after expenses, are earmarked for repaying existing debt, covering fees associated with the planned spin-off of its Technip Energies business, and general corporate purposes including working capital. This move represents a significant refinancing and strategic financial maneuver ahead of the upcoming separation. The notes are senior unsecured obligations, guaranteed by U.S. subsidiaries and expected to be guaranteed by certain international subsidiaries post-spin-off. The issuance, conducted as a private offering, carries specific redemption and repurchase provisions, including a make-whole clause before February 2023 and a mandatory redemption if the Technip Energies spin-off is not completed by July 31, 2021. The accompanying indenture includes standard covenants limiting the company's financial flexibility, which may be eased if the notes achieve investment-grade ratings.

Key Highlights

  • 1Completed $1 billion offering of 6.500% senior notes due 2026, raising approximately $985 million in net proceeds.
  • 2Proceeds to be used for repaying existing debt, funding spin-off related expenses, and general corporate purposes.
  • 3Notes are senior unsecured obligations with guarantees from U.S. subsidiaries and planned guarantees from international subsidiaries post-spin-off.
  • 4Mandatory redemption required if the Technip Energies spin-off is not completed by July 31, 2021.
  • 5Indenture contains customary covenants on debt, dividends, asset sales, and consolidations, with potential for covenant relief upon achieving investment-grade ratings.
  • 6Company may redeem notes prior to maturity under specific conditions, including a 'make-whole' premium before February 2023.
  • 7The issuance was conducted as a private offering exempt from registration requirements under the Securities Act.

Frequently Asked Questions

The primary purposes are to repay and terminate certain of TechnipFMC's existing indebtedness, pay fees and expenses related to the previously announced spin-off of its Technip Energies business segment, and provide working capital and funds for general corporate purposes.

If the spin-off is not consummated by July 31, 2021, or if it is terminated or abandoned prior to that date, TechnipFMC is obligated to redeem all of the notes at 100% of their principal amount, plus accrued interest.

The indenture includes standard covenants that limit the company's and its restricted subsidiaries' ability to incur additional debt, pay dividends, make distributions, repurchase stock, sell assets, make loans, incur liens, and engage in certain other transactions. These covenants may be terminated if the notes achieve investment-grade credit ratings.

The senior notes have a maturity date of February 1, 2026, and carry a fixed interest rate of 6.500% per annum, payable semi-annually on February 1 and August 1.