ENERGIZER HOLDINGS, INC. current report, 23 June 2021

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Business Context and Reporting Period

Company: Energizer Holdings, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: June 23, 2021
Event: Entry into a Material Definitive Agreement regarding the issuance of Senior Notes.

Key Financial Metrics and Transaction Details

This filing reports a debt refinancing transaction rather than operational financial results (revenue, profit, or cash flow).

  • New Debt Issuance: €650 million aggregate principal amount of 3.500% Senior Notes due 2029.
  • Interest Rate: 3.500% per annum.
  • Maturity Date: June 30, 2029.
  • Use of Proceeds: Refinancing €650 million of existing 4.625% Senior Notes due 2026 and paying related fees and expenses.
  • Guarantees: Guaranteed jointly and severally by Energizer Holdings, Inc. and certain domestic restricted subsidiaries.

Material Changes Versus Prior Period

The primary material change is the replacement of higher-interest debt with lower-interest debt.

  • Interest Rate Reduction: The company refinanced notes carrying a 4.625% coupon with new notes carrying a 3.500% coupon, resulting in a reduction of interest expense.
  • Maturity Extension: The maturity of the refinanced debt was extended from 2026 to 2029.

Guidance, Outlook, Risks, and Covenants

Redemption Provisions:

  • Optional Redemption (Post-June 30, 2024): Issuer may redeem at 100% of principal plus a declining premium and accrued interest.
  • Optional Redemption (Pre-June 30, 2024): Issuer may redeem at 100% of principal plus a "make-whole" premium and accrued interest.
  • Equity Redemption: Prior to June 30, 2024, up to 40% of the principal may be redeemed at 103.500% using proceeds from certain equity issuances.
Covenants and Restrictions:
  • The Indenture limits the ability to incur additional debt, issue preferred stock, pay dividends, repurchase stock, incur liens, and engage in affiliate transactions.
  • Covenant Suspension: Most covenants are suspended if the Notes maintain ratings of Baa3 (Moody's) or BBB- (S&P) or higher. If ratings fall below these levels, covenants are reinstated.
Risks and Contingencies:
  • Change of Control: Triggers a mandatory offer to purchase the Notes at 101% of principal plus accrued interest.
  • Asset Sales: Under certain circumstances, asset sales may trigger a mandatory offer to purchase the Notes at 100% of principal plus accrued interest.
  • Default: Customary events of default apply; if triggered, 30% of holders can declare all Notes due and payable immediately.

Important Facts for Investor Verification

  • Verify the exact amount of cash on hand used alongside net proceeds to fully retire the 2026 Notes.
  • Confirm the current credit ratings assigned by Moody's and S&P to determine if covenants are currently suspended.
  • Review the specific terms of the "make-whole" premium calculation for early redemption prior to June 30, 2024.
  • Check for any subsequent filings regarding the impact of this refinancing on the company's overall leverage ratios.