Item 1.01 |
Entry into a Material Definitive Agreement. |
On May 29, 2024, Allegion US Holding Company Inc. (the “Company”), issued $400,000,000 aggregate principal amount of its 5.600% Senior Notes due 2034 (the “Notes”) pursuant to an indenture, dated as of May 29, 2024 (the “Base Indenture”), as supplemented by the First Supplemental Indenture, dated as of May 29, 2024 (the “First Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), each among the Company, as issuer, Allegion plc, as guarantor (the “Guarantor”), and U.S. Bank Trust Company, National Association, as trustee. The Company expects to use the net proceeds from the offering to repay, at maturity, all $400,000,000 outstanding aggregate principal amount of its 3.200% senior notes, which mature in October 2024.
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. 333-278323) filed on March 28, 2024 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 May 29 and November 29 of each year, beginning on November 29, 2024, to holders of record on the preceding May 14 and November 14, 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 May 29, 2034. At any time prior to March 1, 2034 (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 March 1, 2034 (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 repurchase 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 First 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 First 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.