Item 1.01. Entry into a Material Definitive Agreement.
On June 12, 2018, Mueller Water Products, Inc. (the “Company”) issued and sold $450 million aggregate principal amount of
its 5.50% Senior Notes due 2026 (the “Notes”) through a private placement to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities
Act”), or to persons outside the United States pursuant to Regulation S under the Securities Act. The Notes were sold pursuant to a purchase agreement, dated June 7, 2018, among the Company, the wholly-owned subsidiaries named as
guarantors therein (the “Guarantors”), and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the initial purchasers named therein (the “Initial Purchasers”). The proceeds from the offering were
used to repay the Company’s senior secured term loan.
Interest on the Notes is payable semi-annually in cash in arrears on
June 15 and December 15 of each year, commencing December 15, 2018. The Notes will mature on June 15, 2026.
The Notes
were issued under an Indenture, dated June 12, 2018 (the “Indenture”), among the Company, the Guarantors and Wells Fargo Bank, N.A., as trustee. The Indenture contains covenants which, subject to certain exceptions, limit the ability
of the Company and its Restricted Subsidiaries (as defined in the Indenture) to, among other things, incur indebtedness secured by liens, engage in sale/leaseback transactions, pay dividends or make other equity distributions, purchase or redeem
capital stock, make certain investments, and consolidate or merge. The Indenture contains customary events of default. Upon the occurrence of an event of default, payments on the Notes may be accelerated and become immediately due and payable.
Upon a Change of Control (as defined in the Indenture), the Indenture requires the Company to make an offer to repurchase the Notes at 101% of
the principal amount thereof, plus accrued and unpaid interest.
The Company may redeem the Notes at any time prior to June 15, 2021,
in whole or in part, at a redemption price equal to 100% of the principal amount, plus a customary make-whole premium, plus accrued and unpaid interest to, but excluding, the redemption date. In addition, at any time on or prior to June 15,
2021, the Company may redeem up to 40% of the aggregate principal amount of Notes with the proceeds of certain equity offerings at a redemption price equal to 105.500% of the principal amount of the Notes plus accrued and unpaid interest. On or
after June 15, 2021, the Notes will be redeemable, in whole or in part, at the redemption prices specified in the Indenture.
The
Notes rank effectively junior in right of payment to the Company’s and the Guarantors’ existing and future secured indebtedness to the extent of the collateral securing such indebtedness. The Notes are fully and unconditionally guaranteed
jointly and severally on a senior basis by the Guarantors.
The foregoing descriptions of the Indenture and the Notes are qualified in
their entirety to the form of the Note and the Indenture filed herewith as Exhibits 4.1 and 4.2, respectively, and incorporated in this Item 1.01 by reference.
The Initial Purchasers or their affiliates have performed commercial banking, investment banking and advisory services for the Company from
time to time for which they have received customary fees and reimbursement of expenses.