Item 1.01. Entry into a Material Definitive Agreement.
On May 22, 2020 Venator Finance
S.à r.l., a private limited liability company (société à responsabilité limitée)
incorporated under the laws of the Grand Duchy of Luxembourg (“Venator Finance”), and Venator Materials LLC, a
Delaware limited liability company (together with Venator Finance, the “Issuers”), each a wholly owned subsidiary
of Venator Materials PLC (the “Company”), closed its previously announced offering (the “Notes Offering”) of
$225.0 million aggregate principal amount of 9.500% senior secured notes due 2025 (the “Notes”). The Notes were
issued under the Indenture, dated as of May 22, 2020, by and among the Issuers, the guarantors named therein and Wilmington
Trust, National Association, as trustee and as notes collateral agent (the “Indenture”).
The Notes are guaranteed on a senior secured
basis by the Company and each of the Company’s restricted subsidiaries (other than the Issuers and certain other excluded
subsidiaries) that is a guarantor under the Company’s term loan credit facility (the “Term Loan Facility”). In
the future, the Notes will also be guaranteed on a senior secured basis by each of the Company’s restricted subsidiaries
(other than the Issuers and certain other excluded subsidiaries) that is a guarantor under the Company’s asset-based revolving
facility (the “ABL Facility”). The Notes are secured on a first-priority basis by liens on all of the assets that secure
the Term Loan Facility on a first-priority basis and will be secured on a second-priority basis in all inventory, accounts receivable,
deposit accounts, securities accounts, certain related assets and other current assets that secure the ABL Facility on a first-priority
basis and the Term Loan Facility on a second-priority basis, in each case, other than certain excluded assets.
Interest and Maturity
The Notes will mature on July 1, 2025. The
Notes bear interest at the rate of 9.500% per annum, payable in cash semi-annually in arrears on each January 1 and July 1, commencing
January 1, 2021.
Optional Redemption
At any time prior to July 1, 2022, the Issuers
may, on any one or more occasions, redeem up to 40% of the aggregate principal amount of the Notes with an amount of cash not greater
than the net cash proceeds of certain equity offerings at a redemption price equal to 109.500% of the principal amount of the Notes
redeemed, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption, provided that at least 60% of the
aggregate principal amount issued under the Indenture remains outstanding immediately after such redemption and the redemption
occurs within 180 days of the closing date of such equity offering.
At any time prior to July 1, 2022, the Issuers
may, at any time or from time to time, redeem all or a part of the Notes at a redemption price equal to 100% of the principal amount
of the Notes redeemed, plus a “make-whole” premium as of, and accrued and unpaid interest, if any, to, but excluding,
the date of redemption.
On and after July 1, 2022, the Issuers may
redeem the Notes, in whole or in part, at the redemption prices set forth below, plus accrued and unpaid interest, if any, to,
but excluding, the date of redemption:
|
YEAR
|
|
PERCENTAGE
|
|
|
2022
|
|
|
107.125
|
%
|
|
2023
|
|
|
103.563
|
%
|
|
2024 and thereafter
|
|
|
100.000
|
%
|
Change of Control and Asset Sales
If the Issuers experience certain defined
changes of control, each holder of Notes may require the Issuers to repurchase all or a portion of its Notes for cash at a price
equal to 101% of the aggregate principal amount of such Notes, plus any accrued but unpaid interest to the date of repurchase.
In addition, if the Issuers make certain asset sales and do not reinvest the proceeds thereof or use such proceeds to repay certain
debt, they will be required to use the proceeds of such asset sales to make an offer to purchase the Notes at a price equal to
100% of the principal amount of the Notes, plus accrued and unpaid interest.
Certain Covenants
The Indenture contains covenants that, among
other things and subject to certain exceptions and qualifications, limit the Company’s ability and the ability of the Company’s
restricted subsidiaries to: (i) incur or guarantee additional indebtedness or issue certain types of stock; (ii) pay dividends
on capital stock or redeem, repurchase or retire capital stock or subordinated indebtedness; (iii) transfer or sell assets; (iv)
make investments; (v) create certain liens; (vi) enter into agreements that restrict dividends or other payments from their subsidiaries
to them; (vii) consolidate, merge or transfer all or substantially all of their assets; (viii) engage in transactions with affiliates;
and (ix) create unrestricted subsidiaries.
Events of Default
Upon an Event of Default (as defined in
the Indenture), the trustee or the holders of at least 25% of the aggregate principal amount of then outstanding Notes may declare
the Notes immediately due and payable, except that a default resulting from certain events of bankruptcy or insolvency with respect
to the Company, the Issuers, any restricted subsidiary of Company that is a significant subsidiary or any group of restricted subsidiaries
that, taken together, would constitute a significant subsidiary, will automatically cause all outstanding Notes to become due and
payable.
The foregoing description of the Indenture
is qualified in its entirety by reference to the Indenture, a copy of which is attached hereto as Exhibit 4.1 and is incorporated
herein by reference.