Item 1.01
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Entry into a Material Definitive Agreement.
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On October 2, 2017, Allegion US Holding Company Inc.
(Allegion US Holding), a subsidiary of Allegion plc (Allegion), issued $400,000,000 aggregate principal amount of its 3.200% Senior Notes due 2024 (the 2024 Notes) and $400,000,000 aggregate principal amount of
its 3.550% Senior Notes due 2027 (the 2027 Notes and, together with the 2024 Notes, the Notes) pursuant to an Indenture, dated as of October 2, 2017 (the Base Indenture), as supplemented by the First
Supplemental Indenture, dated as of October 2, 2017 (the First Supplemental Indenture), relating to the 2024 Notes, and as further supplemented by the Second Supplemental Indenture, dated as of October 2, 2017 (the Second
Supplemental Indenture and, together with the Base Indenture and the First Supplemental Indenture, the Indenture), relating to the 2027 Notes, each among Allegion US Holding, Allegion, as guarantor, and Wells Fargo Bank, National
Association, as trustee. Allegion US Holding intends to use the net proceeds of the offering (i) to redeem in full Allegion US Holdings 5.75% Senior Notes due 2021, (ii) to redeem in full Allegions 5.875% Senior Notes due 2023,
(iii) to pay the related redemption premiums and all fees and expenses related thereto, (iv) to repay borrowings under Allegions revolving credit facility and (v) to use the remaining proceeds for general corporate purposes.
The Notes and the related guarantee have been registered under the Securities Act of 1933, as amended (the Securities Act), pursuant to
Allegions and the Guarantors shelf registration statement on Form
S-3
(File
No. 333-204424)
filed on May 22, 2015 with the Securities and Exchange
Commission under the Securities Act.
The Notes are senior unsecured obligations of Allegion US Holding and rank equally with all of Allegion US
Holdings existing and future senior unsecured and unsubordinated indebtedness. The guarantee of the Notes is the senior unsecured obligation of Allegion and ranks equally with all of Allegions existing and future senior unsecured and
unsubordinated indebtedness. The Notes and the related guarantee will be effectively subordinated to all of Allegion US Holdings and the Allegions existing and future secured indebtedness to the extent of the value of the assets securing
such indebtedness. The Notes are structurally subordinated to all of the existing and future liabilities of Allegion US Holdings subsidiaries that do not guarantee the Notes.
Allegion US Holding will pay interest on the Notes semi-annually on April 1 and October 1, beginning April 1, 2018, to holders of record on the
preceding March 15 and September 15, as the case may be. Interest will be calculated on the basis of a
360-day
year of twelve
30-day
months. The 2024 Notes
will mature on October 1, 2024. The 2027 Notes will mature on October 1, 2027. At any time prior to August 1, 2024 in the case of the 2024 Notes (the date that is two months prior to the maturity date of the 2024 Notes) and
July 1, 2027 in the case of the 2027 Notes (the date that is three months prior to the maturity date of the 2027 Notes), Allegion US Holding may redeem the Notes in whole or in part at any time and from time to time at a make whole
redemption price. At any time on and after August 1, 2024 in the case of the 2024 Notes (the date that is two months prior to the maturity date of the 2024 Notes) and July 1, 2027 in the case of the 2027 Notes (the date that is three
months prior to the maturity date of the 2027 Notes), Allegion US Holding may redeem the Notes, in whole or in part, at par plus accrued interest to, but not including, the redemption date.
If a change of control repurchase event (as defined in the Indenture) occurs, Allegion US Holding will be required to make an offer to purchase the Notes at a
purchase price equal to 101% of the principal amount of such Notes, plus accrued interest to, but not including, the purchase date.
The Indenture
contains contain certain covenants that, among other things, limit the ability of us or our subsidiaries to (i) create or incur certain liens, (ii) enter into certain sale-leaseback transactions and (iii) enter into certain mergers,
consolidations and transfers of substantially all of our assets. These covenants are subject to important qualifications and exceptions contained in the Indenture.
Copies of the Base Indenture, the First Supplemental Indenture and the Second Supplemental Indenture are attached hereto as Exhibit 4.1, 4.2 and 4.4,
respectively, and are incorporated by reference as though fully set forth herein. The foregoing descriptions of the Base Indenture, the First Supplemental Indenture and the Second Supplemental Indenture are summaries only and are qualified in their
entirety by the complete text of such documents attached hereto as Exhibit 4.1, 4.2 and 4.4.