Black & Decker 2015 Annual Report Download - page 83

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In December 2013, the Company issued $400.0 million aggregate principal amount of 5.75% fixed-to-floating rate junior
subordinated debentures maturing December 15, 2053 (“2053 Junior Subordinated Debentures”). The 2053 Junior
Subordinated Debentures bears interest at a fixed rate of 5.75% per annum, payable semi-annually in arrears to, but excluding
December 15, 2018. From and including December 15, 2018, the 2053 Junior Subordinated Debentures will bear interest at an
annual rate equal to three-month LIBOR plus 4.304% payable quarterly in arrears. The 2053 Junior Subordinated Debentures
are unsecured and rank subordinate and junior in right of payment to all of the Company’s existing and future senior debt. The
2053 Junior Subordinated Debentures rank equally in right of payment with all of the Company’s other unsecured junior
subordinated debt. The Company received proceeds from the offering of $392.0 million, net of $8.0 million of underwriting
discounts and commissions, before offering expenses. The Company used the net proceeds primarily to repay commercial
paper borrowings. The Company may, so long as there is no event of default with respect to the debentures, defer interest
payments on the debentures, from time to time, for one or more Optional Deferral Periods (as defined in the indenture
governing the 2053 Junior Subordinated Debentures) of up to five consecutive years. Deferral of interest payments cannot
extend beyond the maturity date of the debentures. The 2053 Junior Subordinated Debentures include an optional redemption
provision whereby the Company may elect to redeem the debentures, in whole or in part, at a "make-whole" premium based on
United States Treasury rates, plus accrued and unpaid interest if redeemed before December 15, 2018, or at 100% of their
principal amount plus accrued and unpaid interest if redeemed after December 15, 2018. In addition, the Company may
redeem the debentures in whole, but not in part, before December 15, 2018, if certain changes in tax laws, regulations or
interpretations occur at 100% of their principal amount plus accrued and unpaid interest.
In December 2013, the Company also issued 3,450,000 Equity Units, each with a stated value of $100 and received
approximately $334.7 million in cash proceeds, as described in greater detail below.
In November 2012, the Company issued $800 million of senior unsecured term notes, maturing on November 1, 2022 (“2022
Term Notes”) with fixed interest payable semi-annually, in arrears, at a rate of 2.90% per annum. The 2022 Term Notes are
unsecured and rank equally with all of the Company's existing and future unsecured and unsubordinated debt. The Company
received net proceeds of $793.9 million which reflects a discount of $0.7 million and $5.4 million of underwriting expenses
and other fees associated with the transaction. The Company used the net proceeds from the offering for general corporate
purposes, including repayment of short term borrowings. The 2022 Term Notes include a Change of Control provision that
would apply should a Change of Control event (as defined in the Indenture governing the 2022 Term Notes) occur. The
Change of Control provision states that the holders of the Term Notes may require the Company to repurchase, in cash, all of
the outstanding 2022 Term Notes for a purchase price at 101.0% of the original principal amount, plus any accrued and unpaid
interest outstanding up to the repurchase date. In December 2014, the Company repurchased $45.7 million of the 2022 Term
Notes and paid $45.3 million cash and recognized a net pre-tax gain of less than $0.1 million after expensing $0.3 million of
related loan discount costs and deferred financing fees. At January 2, 2016, the Company's carrying value includes $0.4 million
of unamortized discount.
In July 2012, the Company issued $750.0 million of junior subordinated debentures, maturing on July 25, 2052 (“2052 Junior
Subordinated Debentures”) with fixed interest payable quarterly, in arrears, at a rate of 5.75% per annum. The 2052 Junior
Subordinated Debentures are unsecured and rank subordinate and junior in right of payment to all of the Company's existing
and future senior debt. The Company received net proceeds of $729.4 million and paid $20.6 million of fees associated with the
transaction. The Company used the net proceeds from the offering for general corporate purposes, including repayment of debt
and refinancing of near term debt maturities. The Company may, so long as there is no event of default with respect to the
debentures, defer interest payments on the debentures, from time to time, for one or more Optional Deferral Periods (as defined
in the indenture governing the 2052 Junior Subordinated Debentures) of up to five consecutive years per period. Deferral of
interest payments cannot extend beyond the maturity date of the debentures. Additionally, the 2052 Junior Subordinated
Debentures include an optional redemption whereby the Company may elect to redeem the debentures, in whole or in part, at
the redemption price plus accrued and unpaid interest if redeemed before July 25, 2017, or at 100% of their principal amount
plus accrued and unpaid interest if redeemed after July 25, 2017.
At January 2, 2016, the Company's carrying value of its $400.0 million notes payable due 2021 includes a loss of $2.7 million
pertaining to the fair value adjustment of fixed-to-floating interest rate swaps, $10.8 million pertaining to the unamortized gain
on previously terminated swaps and a $0.2 million unamortized discount on the notes.
At January 2, 2016, the Company's carrying value on its $150.0 million notes payable due 2028 includes gains of $3.8 million
pertaining to the fair value adjustment of the fixed-to-floating interest rate swaps and $13.2 million associated with fair value
adjustments made in purchase accounting.
At January 2, 2016, the Company's carrying value of its $400.0 million notes payable due in 2040 includes $36.2 million
pertaining to the unamortized loss on previously terminated fixed-to-floating interest rate swaps and a $0.3 million unamortized
discount on the notes.