Summary
TE Connectivity plc (TEL) announced on February 13, 2023, through its wholly-owned subsidiary Tyco Electronics Group S.A. (TEGSA), the issuance of $500 million in 4.500% Senior Notes due 2026. The net proceeds from this debt offering, approximately $497.3 million after deducting the underwriters' discount, are intended for general corporate purposes, which may include the repayment of existing debt. The Notes are senior unsecured obligations of TEGSA, guaranteed by TE Connectivity, and rank equally with TEGSA's other senior debt. This filing details the terms of the Notes, including provisions for redemption at TEGSA's option under specific circumstances such as make-whole provisions or adverse tax changes. The indenture includes covenants that limit TEGSA's ability to create liens or enter into sale and lease-back transactions. Importantly, a change of control event, coupled with a downgrade in the Notes' rating below investment grade by two major credit rating agencies, would trigger an offer for TEGSA to repurchase all outstanding Notes at a premium. Various events of default are also outlined, including payment defaults, covenant breaches, and bankruptcy-related events.
Key Highlights
- 1TE Connectivity plc (TEL) subsidiary, TEGSA, issued $500 million in 4.500% Senior Notes due 2026.
- 2Net proceeds of approximately $497.3 million are allocated for general corporate purposes, potentially including debt repayment.
- 3The Notes are guaranteed by TE Connectivity and are senior unsecured obligations of TEGSA.
- 4TEGSA has the option to redeem the Notes, subject to specific make-whole provisions or adverse tax changes.
- 5A change of control event, combined with a credit rating downgrade below investment grade, could trigger a mandatory repurchase offer by TEGSA at a premium.
- 6The indenture contains covenants restricting liens and sale and lease-back transactions.