What is the primary purpose of this new debt issuance?

The primary purpose of the €500 million Senior Notes offering is to provide Johnson Controls International plc with additional financial flexibility. The net proceeds will be used for general corporate purposes, specifically to repay outstanding commercial paper and other near-term indebtedness.

How do these new Notes rank in the company's capital structure?

The Notes are unsecured and unsubordinated obligations of the Issuers (Johnson Controls International plc and Tyco Fire & Security Finance S.C.A.). They rank senior to any debt that is expressly subordinated and rank equally with other unsecured and unsubordinated debt. However, they are effectively junior to any secured debt of the Issuers and structurally junior to any debt issued by the company's subsidiaries.

What are the key terms of the Notes regarding interest, maturity, and potential early redemption?

The Notes carry a fixed interest rate of 3.125% per annum, payable annually on December 11, with the first payment due on December 11, 2025. The Notes mature on December 11, 2033. The company can redeem the Notes at any time before September 11, 2033, at a 'make-whole' price or par, whichever is greater, plus accrued interest. After September 11, 2033, the Notes can be redeemed at par plus accrued interest. Redemption is also possible upon specified tax events.

What happens to the Notes in the event of a Change of Control?

In the event of a Change of Control Triggering Event (as defined in the Indenture), noteholders have the right to require the Issuers to repurchase their Notes at a price of 101% of the principal amount, plus any accrued and unpaid interest, unless the company has already exercised its right to redeem the Notes.

JCI 8-K SEC Disclosure — Dec 11, 2024

Summary

Johnson Controls International plc (JCI) announced the completion of a €500 million offering of 3.125% Senior Notes due 2033 on December 11, 2024. The issuance, facilitated by an Underwriting Agreement with BofA Securities Europe SA, Crédit Agricole Corporate and Investment Bank, and ING Bank N.V. as lead underwriters, aims to strengthen the company's financial flexibility. The net proceeds are earmarked for general corporate purposes, including the repayment of outstanding commercial paper and other near-term indebtedness, with any temporarily unallocated funds to be invested in short-term, investment-grade securities. The Notes are unsecured and unsubordinated obligations of the Issuers (JCI and its subsidiary Tyco Fire & Security Finance S.C.A.), ranking senior to any subordinated debt and equal to non-subordinated debt. However, they are effectively junior to secured indebtedness and structurally junior to debt incurred by subsidiaries. The offering represents a strategic move by JCI to manage its debt profile and ensure adequate liquidity, with specific terms outlined in the Thirteenth Supplemental Indenture.

Key Highlights

1Completed €500 million offering of 3.125% Senior Notes due 2033.
2Proceeds to be used for general corporate purposes, including repayment of near-term debt and commercial paper.
3Notes are unsecured and unsubordinated obligations of JCI and TFSCA.
4Interest rate on the Notes is 3.125% per annum, payable annually.
5Notes mature on December 11, 2033.
6Includes provisions for redemption, including a 'make-whole' amount prior to September 11, 2033, and at par thereafter.
7Change of Control Triggering Event allows noteholders to require repurchase at 101% of principal.

Johnson Controls International plc 8-K Report, Corporate Update (Dec 11, 2024)

Summary

Key Highlights

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