Item 1.01 Entry into a Material Definitive Agreement.
Offering of Senior Notes
On
June 14, 2019, Stericycle, Inc. (the
Company
) closed its previously announced private offering of $600.0 million aggregate principal amount of 5.375% Senior Notes due July 2024 (the
Notes
). The Company
received net proceeds from the offering of approximately $593.5 million, after deducting the initial purchasers discounts and expenses. The Company used the net proceeds from the offering of the Notes and additional borrowings under its
amended senior credit facility to repay all $1,075.0 million aggregate principal amount of its outstanding private placement notes. The interest rates payable on the Companys private placement notes were subject to increase if, among
other things, the Companys consolidated leverage ratio (excluding certain
add-backs
to EBITDA) exceeded 3.75 to 1.00 and its credit rating declined as of the end of any fiscal quarter ending on or before
March 31, 2020. For additional information regarding the interest rates payable on the Companys private placement notes prior to their repayment, see
Part II. Item 8. Financial Statements and Supplementary Data; Note 8 Debt
included in our Annual Report on Form
10-K
for the fiscal year ended December 31, 2018.
The Notes were issued pursuant to an Indenture, dated as of June 14, 2019 (the
Indenture
), between the Company, the
guarantors named therein (the
Guarantors
) and U.S. Bank National Association, as trustee.
This Current Report on
Form 8-K
does not constitute an offer to sell, or the solicitation of an offer to buy, the Notes. Any offers of the Notes were made only by means of a private offering memorandum. The Notes have not been
registered under the Securities Act of 1933, as amended (the
Securities Act
), or the securities laws of any other jurisdiction, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S.
persons absent registration or an applicable exemption from registration requirements. The Notes were sold to qualified institutional buyers as defined in Rule 144A under the Securities Act and to
non-U.S.
persons outside the United States under Regulation S under the Securities Act.
Indenture
The Notes are the senior unsecured obligations of the Company and are fully and unconditionally guaranteed, subject to certain
exceptions, by each of the Companys current and, subject to certain exceptions, future subsidiaries that guarantee the Companys senior credit facility or certain other debt of the Company or the Guarantors. The Indenture limits the
ability of the Company and its subsidiaries (subject to certain exceptions and qualifications) to incur certain liens, enter into certain sale and leaseback transactions, and consolidate, merge or sell all or substantially all of their assets.
The notes will be redeemable, in whole or in part, at any time or from time to time on or after July 15, 2021, at the redemption prices
specified in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. At any time and from time to time prior to July 15, 2021, the Notes may be redeemed, in whole or in part, at a redemption price of
100% of the principal amount thereof, plus a make-whole premium and accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, the Company may redeem up to 40% of the Notes at any time or from time to time
before July 15, 2021, with the net cash proceeds from certain equity offerings at a redemption price equal to 105.375%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
In the event of a change of control of the Company and a rating downgrade, the Company will be required to offer to repurchase all outstanding
Notes at 101% of their principal amount, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date.
The Indenture
contains customary events of default, which include (subject in certain cases to customary grace and cure periods), nonpayment of principal or interest; breach of other agreements in the Indenture; failure to pay certain other indebtedness; certain
events of bankruptcy or insolvency; failure to pay certain final judgments; and failure of certain guarantees to be enforceable.