Item 1.01. Entry into a Material Definitive Agreement.
Issuance of 7.250% Senior Secured Notes due 2029
On October 8, 2024, Wayfair LLC (the “Issuer”), a subsidiary of Wayfair Inc. (“Wayfair”), issued $800 million aggregate principal amount of 7.250% senior secured notes due 2029 (the “Notes”).
Wayfair intends to use the net proceeds from the Notes offering, together with cash on hand, for the repayment of certain of Wayfair’s existing convertible senior notes and general corporate purposes.
The Notes and related guarantees have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act. The Notes were offered only to persons reasonably believed to be qualified institutional buyers in accordance with Rule 144A under the Securities Act and to non-U.S. persons in accordance with Regulation S under the Securities Act. This Current Report on Form 8-K shall not constitute an offer to purchase, a solicitation of an offer to sell, or notice of redemption with respect to any of Wayfair’s outstanding convertible notes.
Indenture
The Notes were issued under an Indenture, dated October 8, 2024 (the “Indenture”), among the Issuer, the guarantors named therein (including Wayfair) and U.S. Bank Trust Company, National Association, as trustee and notes collateral agent.
The Indenture provides, among other things, that the Notes will be senior secured obligations of the Issuer. Interest on the Notes is payable semi-annually, in arrears, on April 15 and October 15 of each year, commencing on April 15, 2025, at a rate of 7.250% per annum, until their maturity date of October 31, 2029. The Indenture contains covenants that restrict the Issuer’s ability and the ability of its restricted subsidiaries to, among other things:
| | • | | incur additional indebtedness; |
| | • | | declare or pay dividends, redeem stock or make other distributions or restricted payments; |
| | • | | make certain investments; |
| | • | | enter into certain transactions with affiliates; |
| | • | | agree to certain restrictions on the ability of the Issuer’s restricted subsidiaries to make certain payments; |
| | • | | sell or transfer certain assets; and |
| | • | | consolidate, merge, sell or otherwise dispose of all or substantially all of the Issuer’s or its restricted subsidiaries’ assets. |
These covenants are subject to a number of important limitations, qualifications and exceptions. In addition, certain of these covenants, including the limitation on indebtedness, will cease to apply to the Notes for so long as the Notes have investment grade ratings from any two of the prescribed rating agencies.
If a change of control occurs, the Issuer may be required to offer the holders of the Notes an opportunity to sell all or part of their Notes at a purchase price of 101% of the principal amount of such Notes, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase. In addition, if Wayfair sells assets under certain circumstances, the Issuer may be required to make an offer to purchase a portion of the Notes.
At any time prior to October 31, 2026, the Issuer may on one or more occasions redeem the Notes, in whole or in part, at a price equal to 100% of the principal amount of the Notes redeemed, plus a “make-whole” premium, as set forth in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. On or after October 31, 2026, the Issuer may on one or more occasions redeem the Notes, in whole or in part, at the applicable redemption prices set forth in the Indenture, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
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