Item 8.01
Other Events.
On October 13, 2016, Ecolab Inc. (the Company) entered into an underwriting agreement (the Underwriting Agreement) with Citigroup Global Markets Inc. and
Credit Suisse Securities (USA) LLC, as Representatives of the several Underwriters (the Underwriters), pursuant to which the Company agreed to issue and sell to the Underwriters $750,000,000 aggregate principal amount of its 2.700% Notes due 2026 (the 2026 Notes) and $250,000,000 aggregate principal amount of its 3.700% Notes due 2046 (the 2046 Notes and together with the 2026 Notes, the Notes). On October 18, 2016, the Company completed the offering, and the Notes were issued pursuant to an Indenture (the Base Indenture), dated January 12, 2015, between the Company and Wells Fargo Bank, National Association, as trustee (the Trustee), as amended by the Fourth Supplemental Indenture, dated October 18, 2016 (the Fourth Supplemental Indenture and together with the Base Indenture, the Indenture), between the Company and the Trustee.
The 2026 Notes bear interest at a rate of 2.700% per annum, payable semiannually in arrears on May 1 and November 1 of each year, beginning on May 1, 2017. The 2026 Notes will mature on November 1, 2026 and are redeemable at the Companys option in whole at any time or in part from time to time, at the redemption prices specified in the Indenture.
The 2046 Notes bear interest at a rate of 3.700% per annum, payable semiannually in arrears on May 1 and November 1 of each year, beginning on May 1, 2017. The 2046 Notes will mature on November 1, 2046 and are redeemable at the Companys option in whole at any time or in part from time to time, at the redemption prices specified in the Indenture.
Under the Indenture, specified changes of control involving the Company, when accompanied by a downgrade of the Notes below investment grade rating by both Moodys Investors Service, Inc. and S&P Global Ratings within a specified time period, constitute change of control repurchase events. Upon the occurrence of a change of control repurchase event with respect to the Notes, unless the Company has exercised its option to redeem the Notes, it will be required to offer to repurchase the Notes at a price equal to 101% of the aggregate principal amount thereof, plus any accrued and unpaid interest to the date of repurchase.
The Indenture contains covenants that limit, among other things, the ability of the Company and its subsidiaries to incur liens on certain properties to secure debt, to engage in sale and leaseback transactions and to transfer certain property, stock or debt of any restricted subsidiary to any unrestricted subsidiary (each as defined in the Indenture). The Indenture also provides for customary events of default, which include (subject in certain cases to a customary grace and cure periods), among others, nonpayment of principal or interest on the Notes; failure to comply with certain other covenants or agreements under the Indenture; and specified events of bankruptcy or insolvency. In the case of an event of default, the trustee or the holders of at least 25% in principal amount of the Notes then outstanding may declare all of the Notes to be due and payable immediately.
The Notes are senior unsecured and unsubordinated obligations of the Company and rank equally with all other senior and unsubordinated indebtedness of the Company from time to time outstanding.
The public offering price of the Notes was 99.685% of the principal amount of the 2026 Notes and 99.549% of the principal amount of the 2046 Notes. The Company received net proceeds (after deducting underwriting discounts and the Companys offering expenses) of approximately $987.5 million and intends to use such net proceeds to repay commercial paper borrowings, which commercial paper borrowings were issued for general corporate and working capital purposes, and, together with additional commercial paper borrowings, to repay the Companys 3.000% senior notes due 2016 at maturity.
The Notes were offered and sold pursuant to the Companys automatic shelf registration statement on Form S-3 (Registration No. 333-201445) under the Securities Act of 1933, as amended, which was filed and became effective on January 12, 2015. The Company has filed with the Securities and Exchange Commission a prospectus supplement, dated October 13, 2016, together with the accompanying prospectus, dated January 12, 2015, relating to the offering and sale of the Notes.
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