UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 11, 2016
Commission File |
|
Exact name of Registrant as specified in its |
|
State of |
|
I.R.S. Employer |
001-35979 |
|
HD SUPPLY HOLDINGS, INC. 3100 Cumberland Boulevard, Suite 1480 |
|
Delaware |
|
26-0486780 |
333-159809 |
|
HD SUPPLY, INC. 3100 Cumberland Boulevard, Suite 1480 |
|
Delaware |
|
75-2007383 |
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
5.75% Senior Notes due 2024
On April 11, 2016 HD Supply, Inc. (the Company), an indirect wholly-owned subsidiary of HD Supply Holdings, Inc., issued $1,000,000,000 in aggregate principal amount of its 5.75% Senior Notes due 2024 (the Notes) under an Indenture, dated as of April 11, 2016 (the Base Indenture), among the Company, certain subsidiaries of the Company, as guarantors (the Subsidiary Guarantors) and Wells Fargo Bank, National Association, as Trustee (in such capacity, the Trustee), as supplemented by the First Supplemental Indenture, dated as of April 11, 2016, among the Company, the Subsidiary Guarantors and the Trustee (the First Supplemental Indenture and, together with the Base Indenture, the Indenture).
Ranking; Guarantees
The Notes are unsecured senior indebtedness of the Company and rank:
· equal in right of payment with all of our existing and future senior indebtedness;
· senior in right of payment to all of the Companys existing and future subordinated indebtedness;
· effectively subordinated to all of the Companys existing and future secured indebtedness, including, without limitation, indebtedness under the Companys revolving asset-based credit facility providing for senior secured revolving loans and letters of credit up to a maximum principal amount of $1,500,000,000 (subject to availability under a borrowing base) (the Senior ABL Facility), the Companys term credit facility providing for term loans in an original aggregate principal amount of $850,000,000 (the Term Loan Facility and, together with the Senior ABL Facility, the Senior Credit Facilities) and the Companys outstanding $1,250,000,000 aggregate principal amount of 5.25% Senior Secured First Priority Notes due 2021 (the First Priority Notes), to the extent of the value of the collateral securing such indebtedness; and
· structurally subordinated to approximately $22 million of indebtedness and other liabilities of the Companys non-guarantor subsidiaries, including all of our foreign subsidiaries, as of January 31, 2016.
The Notes are guaranteed, on a senior unsecured basis, by each of the Companys direct and indirect domestic existing and future subsidiaries that is a wholly owned domestic subsidiary (other than certain excluded subsidiaries), and by each other domestic subsidiary that is a borrower under the Senior ABL facility or that guarantees the Companys obligations under any credit facility or capital markets securities. These guarantees are subject to release under specified circumstances. The guarantee of each Subsidiary Guarantor is a senior unsecured obligation of that Subsidiary Guarantor and ranks:
· equal in right of payment with all existing and future senior indebtedness of that Subsidiary Guarantor;
· senior in right of payment to all existing and future subordinated indebtedness of such Subsidiary Guarantor; and
· effectively subordinated to all existing and future secured indebtedness of that Subsidiary Guarantor, including, without limitation, indebtedness under the Senior Credit Facilities and the First Priority Notes, to the extent of the value of the collateral owned by such Subsidiary Guarantor; and
· structurally subordinated to all indebtedness and other liabilities of any non-guarantor subsidiary of that Subsidiary Guarantor.
Redemption
The Company may redeem the Notes, in whole or in part, at any time (1) prior to April 15, 2019, at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, plus the applicable make-whole premium set forth in the Indenture and (2) on and after April 15, 2019, at the applicable redemption price set forth below (expressed as a percentage of principal amount), plus accrued and unpaid interest, if any, to the relevant redemption date, if redeemed during the 12-month period commencing on April 15 of the year set forth below.
Year |
|
Percentage |
|
2019 |
|
104.313 |
% |
2020 |
|
102.875 |
% |
2021 |
|
101.438 |
% |
2022 and thereafter |
|
100.000 |
% |
In addition, at any time prior to April 15, 2019, the Company may redeem on one or more occasions up to 40% of the aggregate principal amount of the Notes with the proceeds of certain equity offerings at a redemption price of 105.75% of the principal amount in respect of the Notes being redeemed, plus accrued and unpaid interest to the redemption date, provided, however, that if the Notes are redeemed, an aggregate principal amount of Notes equal to at least 50% of the original aggregate principal amount of Notes must remain outstanding immediately after each such redemption of Notes.
Offer to Repurchase
In the event of certain events that constitute a Change of Control (as defined in the Indenture), the Company must offer to repurchase all of the Notes (unless otherwise redeemed) at a price equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to the repurchase date. If the Company sells assets under certain circumstances, the Company must use the proceeds to reinvest in additional assets or to repay any indebtedness or otherwise make an offer to purchase the Notes at a price equal to 100% of their principal amount, plus accrued and unpaid interest, if any, to the date of purchase.
Covenants
The Indenture contains covenants that, among other things, limit the ability of the Company and the ability of its restricted subsidiaries, as described in the Indenture, to: incur more indebtedness; pay dividends, redeem stock or make other distributions; make investments; create restrictions on the ability of the Companys restricted subsidiaries to pay dividends to the Company or make other intercompany transfers; create liens; transfer or sell assets; merge or consolidate; and enter into certain transactions with the Companys affiliates. Most of these covenants will cease to apply for so long as the Notes have investment grade ratings from both Moodys Investment Services, Inc. and Standard & Poors.
Events of Default
The Indenture also provides for events of default, which, if any of them occurs, would permit or require the principal, premium, if any, interest and other monetary obligations on all the then outstanding Notes issued under the Indenture to be due and payable immediately.
Item 1.02. Termination of a Material Definitive Agreement.
On March 28, 2016 (the Redemption Notice Date), the Company delivered a conditional notice of redemption (the Redemption Notice) relating to all of its then outstanding 11.50% Senior Notes due 2020 (the Old Notes), issued pursuant to the Indenture, dated as of October 15, 2012 (as supplemented, the Old Notes Indenture), among the Company, the subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as trustee (in such capacity, the Old Notes Trustee). The Redemption Notice conditioned the redemption of the Old Notes upon the consummation of certain transactions, including the issuance of the Notes, which were consummated on April 11, 2016. On April 11, 2016 the Company irrevocably deposited with the Old Notes Trustee funds solely for the benefit of the holders of the Old Notes, cash in U.S. dollars in an amount as was sufficient to pay and discharge the entire aggregate principal amount of the Old Notes not theretofore cancelled or delivered to the Old Notes Trustee for cancellation (the Remaining Notes), for principal of, and premium and accrued interest on, the Remaining Notes to April 27, 2016, the date specified in the Notice of Redemption for redemption of the Remaining Notes. The Old Notes Trustee then entered into an Acknowledgment of Satisfaction, Discharge and Release, dated as of April 11, 2016, with respect to the Old Notes Indenture.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information contained in Item 1.01 concerning the Companys direct financial obligations under the Indenture and the Notes is hereby incorporated herein by reference.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: April 11, 2016 |
HD Supply Holdings, Inc. | |
|
|
|
|
By: |
/s/ Dan S. McDevitt |
|
|
Dan S. McDevitt |
|
|
General Counsel and Corporate Secretary |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: April 11, 2016 |
HD Supply, Inc. | |
|
|
|
|
By: |
/s/ Dan S. McDevitt |
|
|
Dan S. McDevitt |
|
|
General Counsel and Corporate Secretary |