| Item 1.01 |
Entry into a Material Definitive Agreement.
|
On June 22, 2022, Allegion US Holding Company Inc. (the
“Company”), issued $600,000,000 aggregate principal amount of its
5.411% Senior Notes due 2032 (the “Notes”) pursuant to an
indenture, dated as of October 2, 2017 (the “Base Indenture”),
as supplemented by the Fourth Supplemental Indenture, dated as of
June 22, 2022 (the “Fourth Supplemental Indenture” and,
together with the Base Indenture, the “Indenture”), each among the
Company, as issuer, Allegion plc, as guarantor (the “Guarantor”),
and Computershare Trust Company, N.A., as successor to Wells Fargo
Bank, National Association, as trustee (the “Trustee”). The Company
intends to use all of the net proceeds of this offering, together
with cash on hand and additional borrowings under its revolving
credit facility, to finance the acquisition of Stanley Access
Technologies LLC and assets related to the automatic entrance
solutions business from Stanley Black & Decker, Inc., which is
expected to close in the third quarter of 2022, subject to
regulatory approval and customary closing conditions (the
“Transaction”), to pay related fees and expenses, and/or otherwise
for general corporate purposes. In the event that the Transaction
does not close as contemplated by the Transaction Agreement, the
Company intends to use the net proceeds of the offering of the
Notes for general corporate purposes, including repayment of
outstanding indebtedness.
The Notes and the related guarantee have been registered under the
Securities Act of 1933, as amended (the “Securities Act”), pursuant
to the Company’s and the Guarantor’s shelf registration statement
on Form S-3 (File
No. 333-255225) filed
on April 14, 2021 with the Securities and Exchange Commission
under the Securities Act.
The Notes are senior unsecured obligations of the Company and rank
equally with all of the Company’s existing and future senior
unsecured indebtedness. The guarantee of the Notes is the senior
unsecured obligation of the Guarantor and ranks equally with all of
the Guarantor’s existing and future senior unsecured indebtedness.
The Notes and the related guarantee will be effectively
subordinated to all of the Company’s and the Guarantor’s 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 the
Company’s subsidiaries that do not guarantee the Notes.
The Company will pay interest on the Notes semi-annually on
January 1 and July 1, beginning January 1, 2023, to
holders of record on the preceding December 15 and
June 15, as the case may be. Interest will be calculated on
the basis of a 360-day year
of twelve 30-day months.
The Notes will mature on July 1, 2032. At any time prior to
April 1, 2032 (the date that is three months prior to the
maturity date of the Notes), the Company 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 April 1,
2032 (the date that is three months prior to the maturity date of
the Notes), the Company may redeem the Notes, in whole or in part,
at par plus accrued interest to, but not including, the redemption
date.
In the event of a change of control repurchase event (as defined in
the Indenture), the Company 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 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.
Except as required by law, the Company will make payments on the
Notes free of withholding or deduction for taxes or other
governmental charges. If such a withholding or deduction is
required by the Company, the Company will, subject to certain
exceptions, be required to pay additional amounts so that the net
amounts holders of the Notes receive will equal the amount holders
of the Notes would have received if withholding or deduction had
not been imposed. If, as a result of a change in law, the Company
is required to pay such additional amounts, the Company may redeem
the Notes in whole but not in part at 100% of their principal
amount, plus accrued and unpaid interest, if any, and additional
amounts, if any, to the redemption date.
Copies of the Base Indenture, the Fourth Supplemental Indenture and
the form of Note are attached hereto as Exhibits 4.1, 4.2 and 4.3,
respectively, and are incorporated by reference as though fully set
forth herein. The foregoing descriptions of the Base Indenture, the
Fourth Supplemental Indenture and the form of Note are summaries
only and are qualified in their entirety by the complete text of
such documents attached hereto as Exhibits 4.1, 4.2 and 4.3,
respectively.