Item 1.01
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Entry into a Material Definitive
Agreement.
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On
May 29, 2019, Ladenburg Thalmann Financial Services Inc. (the “Company”) entered into a fourth supplemental indenture,
dated as of May 29, 2019 (the “Fourth Supplemental Indenture”), further supplementing the base indenture, dated as
of November 21, 2017 (the “Base Indenture”), as previously supplemented by a First Supplemental Indenture, dated as
of November 21, 2017, a Second Supplemental Indenture, dated as of May 30, 2018, and a Third Supplemental Indenture, dated as
of August 16, 2018, between the Company and U.S. Bank National Association, as trustee (the “Trustee”) in connection
with the Company’s previously disclosed offering of $50,000,000 aggregate principal amount of its 7.75% Senior Notes due
2029 (the “Firm Notes”), plus an additional $7,500,000 aggregate principal amount of 7.75% Senior Notes due 2029 to
cover underwriter overallotments, if any (the “Additional Notes,” and together with the Firm Notes, the “Notes”),
pursuant to an Underwriting Agreement, dated as of May 21, 2019 (the “Underwriting Agreement”), between the Company
and UBS Securities LLC, Morgan Stanley & Co. LLC and RBC Capital Markets, LLC, as representatives of the underwriters named
in Schedule A thereto (the “Underwriters”). On May 24, 2019, the Underwriters exercised the overallotment option in
full.
The
Notes are senior unsecured obligations of the Company and rank equally in right of payment with all of the Company’s existing
and future senior unsecured and unsubordinated indebtedness, including, but not limited to, the Company’s outstanding 6.50%
Senior Notes due 2027 (the “2027 Notes”), 7.00% Senior Notes due 2028 (the “7.00% 2028 Notes”), 7.25%
Senior Notes due 2028 (the “7.25% 2028 Notes”), 7.25% Senior Notes due 2028 issued in a private transaction in December
2018 (the “December 2018 Notes”) and any 2027 Notes, 7.00% 2028 Notes, 7.25% 2028 Notes, December 2018 Notes or additional
Notes the Company may issue in the future. The Notes are effectively subordinated in right of payment to all of the Company’s
existing and future secured indebtedness and structurally subordinated to all existing and future indebtedness of the Company’s
subsidiaries. The Notes bear interest from May 29, 2019 at the rate of 7.75% per annum, payable quarterly in arrears on March
31, June 30, September 30 and December 31 of each year, commencing on September 30, 2019, and at maturity. The Notes mature on
June 30, 2029.
The
Company may, at its option, at any time and from time to time, on or after June 30, 2022, redeem the Notes, in whole or in part,
at a redemption price equal to 100% of the outstanding principal amount thereof plus accrued and unpaid interest to, but excluding,
the date fixed for redemption. On and after any redemption date, interest will cease to accrue on the redeemed Notes.
The
Base Indenture, as supplemented by the Fourth Supplemental Indenture, provides for the form of, and terms of, the Notes as described
herein and the issuance of the Notes as a new series of securities of the Company. The Base Indenture, as supplemented by the
Fourth Supplemental Indenture, contains customary events of default and cure provisions. If an uncured default occurs and is continuing,
the Trustee or the holders of at least 25% of the outstanding principal amount of the Notes may declare the entire principal amount
of the Notes, together with accrued and unpaid interest, if any, to be due and payable immediately by a notice in writing to the
Company and, if notice is given by the holders of the Notes, the Trustee. In the case of an event of default involving the Company’s
bankruptcy, insolvency or reorganization, the principal amount of the Notes, together with accrued and unpaid interest, if any,
will automatically, and without any declaration or other action on the part of the Trustee or the holders of the Notes, become
immediately due and payable.
The
foregoing descriptions of the Base Indenture and Fourth Supplemental Indenture and the Notes do not purport to be complete and
are qualified in their entirety by reference to the full text of the Base Indenture, Fourth Supplemental Indenture and the form
of Note. A copy of the Fourth Supplemental Indenture and the form of Note are attached to this Current Report on Form 8-K as Exhibits
4.1 and 4.2, respectively, and incorporated herein by reference and into the Company’s prospectus supplement and accompanying
base prospectus relating to the offering of Notes (together, the “Prospectus”), which forms a part of its Registration
Statement (the “Registration Statement”) on Form S-3 (Registration No. 333-216733). A copy of the Base Indenture is
attached to the Current Report on Form 8-K, filed with the Securities and Exchange Commission on November 21, 2017, as Exhibit
4.1 and is incorporated herein by reference and into the Registration Statement.
On
May 29, 2019, the Company completed the sale of the Notes. The sale of the Notes resulted in net proceeds of approximately $55,688,750
after deducting underwriting discounts and commissions of approximately $1,811,250, but before expenses. The Company plans to
use the net proceeds from the offering for general corporate purposes.
Attached
as Exhibit 5.1 to this Current Report on Form 8-K and incorporated herein by reference is a copy of the opinion of Greenberg Traurig,
LLP. relating to the validity of the Notes (the “Legal Opinion”). The Legal Opinion is also filed with reference
to, and is hereby incorporated by reference into, the Prospectus.