| Item 1.01. | Entry into a Material Definitive Agreement. |
On June 14, 2023, Fortune Brands Innovations, Inc. (the “Company”) (i) entered into a Fifth Supplemental Indenture date as of June 14, 2023 (the “Supplemental Indenture”), supplementing the Indenture dated as of June 15, 2015 (the “Base Indenture”) with Wilmington Trust, National Association, as trustee, and Citibank, N.A., as securities agent (the Base Indenture and the Supplemental Indenture, together, the “Indenture”), and (ii) issued $600 million aggregate principal amount of the Company’s 5.875% Senior Notes due 2033 (the “Notes”) pursuant to the Indenture.
The Notes will mature on June 1, 2033 and bear interest at a fixed rate of 5.875% per annum. Interest on the Notes will accrue from June 14, 2023 and be payable semi-annually in arrears on June 1 and December 1 of each year, commencing December 1, 2023. The Notes constitute senior unsecured obligations of the Company and rank equally in right of payment with all of the Company’s existing and future senior unsecured indebtedness from time to time outstanding and rank senior in right of payment to all of the Company’s existing and future subordinated indebtedness outstanding from time to time.
Prior to March 1, 2033 (the “Par Call Date”), the Company may redeem the Notes, in whole or in part, at any time and from time to time, for cash, at a redemption price equal to the greater of: (1) (a) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date (assuming the Notes to be redeemed matured on the Par Call Date) on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined in the Supplemental Indenture) plus 35 basis points, less (b) interest accrued to the date of redemption; and (2) 100% of the principal amount of the Notes to be redeemed, plus, in either case, accrued and unpaid interest thereon to the redemption date.
On and after the Par Call Date, the Company may redeem the Notes, in whole or in part, at any time and from time to time, for cash, at a redemption price equal to 100% of the principal amount of the Notes being redeemed plus accrued and unpaid interest thereon to the redemption date.
The Indenture contains covenants that require the Company to satisfy certain conditions in order to incur debt secured by liens, engage in sale and leaseback transactions or merge or consolidate with another entity or sell, assign, transfer, lease or otherwise convey all or substantially all of its assets to another person. The Indenture also provides for customary events of default and other customary provisions.
If a Change of Control Repurchase Event (as defined in the Supplemental Indenture) occurs, the Company will be required to make an offer on the terms set forth in the Supplemental Indenture to each holder of the Notes to repurchase, for cash, all or any part of that holder’s Notes at a purchase price equal to 101% of the principal amount of the Notes repurchased, plus accrued and unpaid interest, if any, on the Notes repurchased, to, but not including, the date of repurchase, unless the Company has exercised its right to redeem the Notes.
The preceding descriptions of the Supplemental Indenture and the Notes are qualified by reference to the full texts of the Supplemental Indenture and form of the Note, which are attached hereto as Exhibits 4.12 and 4.13 respectively, and incorporated herein by reference
The Notes were offered and sold by the Company pursuant to its automatic shelf registration statement on Form S-3ASR (Registration Statement No. 333-255730), filed with the Securities and Exchange Commission on May 3, 2021, as supplemented by a prospectus supplement dated June 6, 2023 and filed with the Securities and Exchange Commission on June 8, 2023.
The aggregate net proceeds from the sale of the Notes were approximately $593,034,000, after deducting the price discount, underwriting fees and estimated offering expenses. The Company intends to use the net proceeds from the Offering to repay its 4.000% Senior Notes due September 2023 (the “2023 Senior Notes”) and for general corporate purposes, including working capital, capital expenditures, permitted acquisitions and other lawful corporate purposes.
Some of the underwriters and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with the Company or its affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions. Certain of the underwriters or their affiliates may hold the Company’s 2023 Senior Notes. Accordingly, certain of the underwriters
