ITEM 1.01.
|
ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
|
On April 29, 2021, Carriage Services, Inc. (the “Company”) and certain of the Company’s existing subsidiaries (the “Subsidiary Guarantors”) entered into a Purchase Agreement (the “Purchase Agreement”) with BofA Securities, Inc., as representative of the several initial purchasers named therein (collectively, the “Purchasers”), under which the Company agreed to sell $400 million in aggregate principal amount of 4.25% Senior Notes due 2029 (the “Notes”) in a private placement to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A and to certain non-U.S. persons outside of the United States pursuant to Regulation S, each under the Securities Act of 1933, as amended (the “Securities Act”). The Notes will be issued pursuant to an indenture to be entered into among the Company, the Subsidiary Guarantors and Wilmington Trust, National Association, as trustee.
The sale of the Notes to the Purchasers is expected to settle on May 13, 2021, subject to customary closing conditions, and is expected to result in approximately $394 million in net proceeds to the Company after deducting the Purchasers’ discount and estimated offering expenses payable by the Company.
The Company intends to use the net proceeds of the offering, together with borrowings under the amended and restated credit facility, which the Company expects to enter into concurrently with the settlement of the sale of the Notes, to redeem all of its existing 6.625% senior notes due 2026.
The Notes will be unsecured, senior obligations of the Company and will bear interest at a rate of 4.25% per year. Interest will be payable semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2021. The Notes will mature on May 15, 2029, unless earlier repurchased or redeemed.
The Notes will be guaranteed on a senior unsecured basis by the Subsidiary Guarantors.
Pursuant to the Purchase Agreement, the Company and the Subsidiary Guarantors have agreed to indemnify the Purchasers against certain liabilities, including liabilities under the Securities Act.
The foregoing description of the Purchase Agreement is not complete and is qualified by reference to the document, which is filed as Exhibit 1.1 to this Current Report on Form 8-K, and is incorporated herein by reference.