Summary
TE Connectivity plc (TEL) filed an 8-K on February 26, 2015, primarily detailing a material definitive agreement related to the issuance of new debt. Specifically, its wholly-owned subsidiary, Tyco Electronics Group S.A. (TEGSA), issued €550,000,000 aggregate principal amount of 1.100% Senior Notes due 2023. The proceeds from this issuance, approximately €545.8 million after underwriter discounts, are designated for general corporate purposes. The new notes are senior unsecured obligations of TEGSA, guaranteed on an unsecured senior basis by TE Connectivity. The filing outlines the terms for redemption, including optional redemption at a make-whole price before December 1, 2022, and at par thereafter, as well as redemption in the event of certain tax changes. It also details covenants related to liens, sale and lease-back transactions, and consolidation/merger restrictions. Importantly, the agreement includes a provision for a change of control offer to repurchase the notes at 101% of principal if the notes are downgraded below investment grade.
Key Highlights
- 1TEGSA, a subsidiary of TE Connectivity, issued €550 million in 1.100% Senior Notes due 2023.
- 2Net proceeds from the note issuance are approximately €545.8 million and will be used for general corporate purposes.
- 3TE Connectivity Ltd. is providing a full and unconditional guarantee for the Notes.
- 4The Notes are senior unsecured obligations of TEGSA, ranking equally with existing and future senior debt.
- 5Optional redemption is possible before maturity, with a make-whole provision until December 2022 and at par thereafter.
- 6The Indenture includes covenants restricting liens, sale and lease-back transactions, and asset transfers.
- 7A change of control provision mandates an offer to repurchase the notes at 101% of principal if they are downgraded below investment grade.