Item 1.01. Entry into a Material Definitive Agreement.
On May 28, 2014, Audatex North America, Inc. (the "Issuer"), an indirect
wholly-owned subsidiary of Solera Holdings, Inc. ("Solera"), entered into a
purchase agreement (the "Purchase Agreement") with Solera, the other guarantors
named therein (the "Guarantors") and Goldman, Sachs & Co., as initial purchaser
(the "Initial Purchaser"). Pursuant to the Purchase Agreement, the Issuer agreed
to sell to the Initial Purchaser, and the Initial Purchaser agreed to purchase
from the Issuer, $150 million in aggregate principal amount of 6.000% Senior
Notes due 2021 (the "New 2021 Notes"). The sale of the New 2021 Notes closed on
June 2, 2014. The Issuer intends to use the proceeds from the sale of the New
2021 Notes for working capital and other general corporate purposes, which may
include funding the acquisition of the Insurance and Services Division of
Pittsburgh Glass Works, LLC, potential put or call options on securities of
Solera'sService Repair Solutions joint venture and one or more additional
strategic initiatives that it may undertake from time to time.
The New 2021 Notes were issued as additional notes pursuant to an indenture,
dated as of July 2, 2013 (as supplemented or amended, the "Indenture"), among
the Issuer, the Guarantors and U.S. Bank National Association, as trustee (the
"Trustee"), under which the Issuer previously issued $1.36 billion of its 6.000%
Senior Notes due 2021 (the "Existing 2021 Notes" and together with the New 2021
Notes, the "2021 Notes"). The New 2021 Notes were offered at an original issue
price of 106.50% plus accrued interest from December 15, 2013.
The 2021 Notes have not been registered under the Securities Act of 1933, as
amended (the "Securities Act"), and, unless so registered, may not be offered or
sold in the United States absent an applicable exemption from registration
requirements. Holders of 2021 Notes are not entitled to any registration rights
under the Securities Act.
The New 2021 Notes were issued pursuant to a supplemental indenture to
Indenture, dated as of June 2, 2014 (the "Supplemental Indenture"), among the
Issuer, the Guarantors and the Trustee. The New 2021 Notes are treated as a
single class with the Existing 2021 Notes for all purposes and will have the
same terms as those of the Existing 2021 Notes. The New 2021 Notes and the
Existing 2021 Notes are expected to trade fungibly with one another, except that
the New 2021 Notes offered and sold in offshore transactions in reliance on
Regulation S under the Securities Act were issued under a new CUSIP number and
will trade separately during the 40-day distribution compliance period.
The 2021 Notes bear interest at a rate of 6.000% and mature on June 15, 2021.
Interest is payable on the 2021 Notes on June 15 and December 15 of each year;
provided that with respect to the New 2021 Notes, the record date for the first
interest payment date will be June 2, 2014.
The Issuer's obligations under the 2021 Notes are guaranteed by Solera and
substantially all of Solera's material wholly-owned domestic subsidiaries. The
2021 Notes and the guarantees are unsecured senior obligations of the Issuer and
The Indenture contains covenants limiting the ability of Solera and its
subsidiaries to: (i) incur liens; (ii) engage in sale and leaseback
transactions; or (iii) consolidate, merge with, or convey, transfer or lease
substantially all of their assets to, another person. Except if the 2021 Notes
achieve an investment grade rating, the Indenture also limits the ability of any
subsidiary of Solera (other than the Issuer or any parent company of the Issuer)
to incur indebtedness. All of these covenants are subject to important
exceptions and qualifications.
The Indenture provides for events of default (subject in certain cases to
customary grace and cure periods) which include, among others, nonpayment of
principal or interest when due, breach of covenants or other agreements in the
Indenture, defaults in payment of certain other indebtedness, certain events of
bankruptcy or insolvency and when the guarantees of significant subsidiaries
cease to be in full force and effect. Generally, if an event of default occurs,
the Trustee or the holders of at least 25% in principal amount of the then
outstanding 2021 Notes may declare the principal of and accrued but unpaid
interest on all of the 2021 Notes to be due and payable immediately.
At any time prior to June 15, 2016, the Issuer may, subject to certain
conditions, redeem up to 35% of the aggregate principal amount of the 2021 Notes
issued under the Indenture at a redemption price equal to 106.000% of the
principal amount of the 2021 Notes redeemed, plus accrued and unpaid interest,
if any, to the date of redemption. At any time prior to June 15, 2017, the 2021
Notes may be redeemed, in whole or in part, at the option of the Issuer, at a
redemption price equal to 100% of the principal amount of the 2021 Notes
redeemed plus a "make-whole premium" and accrued and unpaid interest to, the
applicable redemption date. On or after June 15, 2017, the Issuer may redeem all
or a part of the 2021 Notes, at the following redemption prices: (i) if the
redemption occurs on or after June 15, 2017 but prior to June 15, 2018, the
redemption price is 103.000% of the principal amount of the 2021 Notes; (ii) if
the redemption occurs on or after June 15, 2018 but prior to June 15, 2019, the
redemption price is 101.500% of the principal amount of the 2021 Notes; and
(iii) if the redemption occurs on or after June 15, 2019, the redemption price
is 100.000% of the principal amount of the 2021 Notes.
If Solera experiences certain change of control events accompanied by certain
ratings events, the Issuer must give holders of the 2021 Notes the opportunity
to sell it their 2021 Notes at 101% of their face amount, plus accrued and
unpaid interest, if any, to the date of purchase.
A copy of the Supplemental Indenture is attached as Exhibit 4.1 to this Current
Report on Form 8-K and is incorporated by reference herein. The description of
the material terms of the Supplemental Indenture is qualified in its entirety by
reference to such exhibit.
A description of the Indenture was included in Solera's Current Report on Form
8-K filed on July 9, 2013 (the "July 9, 2013 Form 8-K") and is incorporated by
reference herein, and a copy of the Indenture was attached as Exhibit 4.1 to the
July 9, 2013 Form 8-K and is incorporated by reference herein. The description
of the material terms of the 2021 Notes and the Indenture is qualified in its
entirety by reference to such description and exhibit.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of the Registrant.
The disclosure under Item 1.01 of this Current Report on Form 8-K relating to
the Supplemental Indenture and the forms of 2021 Notes and related guarantees
are also responsive to Item 2.03 of this report and are incorporated by
reference into this Item 2.03.
Item 8.01. Other Events.
On June 2, 2014, Solera issued a press release announcing the closing of the
private offering of $150 million aggregate principal amount of New 2021 Notes.
A copy of the press release announcing the closing of the offering is attached
hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
Exhibit No. Description
4.1 Supplemental Indenture, dated as of June 2, 2014, supplementing
the Indenture, dated as of July 2, 2013, among Audatex North
America, Inc., Solera Holdings, Inc., the other guarantors named
therein and U.S. Bank National Association, as trustee.
99.1 Press release issued by Solera Holdings, Inc. on June 2, 2014
announcing the closing of the offering.