The Guarantees will be AAG’s senior unsecured obligations. None of AAG’s obligations under the Guarantees will be secured by the Collateral (all of which is owned by American). The Guarantees will rank pari passu in right of payment to all of AAG’s existing and future indebtedness that is not by its terms expressly subordinated to the Guarantees. The Guarantees will be effectively subordinated to all of AAG’s existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness and will be structurally subordinated to all existing and future liabilities, including trade payables, of each of AAG’s subsidiaries (other than American).
Interest on the Notes is payable semiannually in arrears on September 1 and March 1 of each year, beginning on March 1, 2021. The Notes will mature on February 15, 2026.
On or prior to the fourth anniversary of the closing date, American may redeem all or any part of the Notes, at its option, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus a “make-whole” premium, together with accrued and unpaid interest. After the fourth anniversary of the Closing Date and on or prior to the fifth anniversary of the Closing Date, American may redeem all or any part of the Notes, at its option, at a redemption price equal to 105.375% of the principal amount of the Notes redeemed, together with accrued and unpaid interest. After the fifth anniversary of the Closing Date, American may redeem all or any part of the Notes, at its option, at par, together with accrued and unpaid interest.
In the event of a specified change of control, each holder of Notes may require American to repurchase its Notes, in whole or in part, at a repurchase price of 101% of the aggregate principal amount
of the Notes so repurchased
, plus accrued and unpaid interest, if any, to (but not including) the repurchase date.
The Indentures contain covenants that, among other things, restrict the ability of AAG and the ability of its restricted subsidiaries (including American) to: (i) pay dividends, redeem or repurchase stock or make other distributions or restricted payments, (ii) incur liens on the Collateral and dispose of or release the Collateral, (iii) repay subordinated indebtedness, (iv) make certain loans and investments, (v) incur indebtedness or issue preferred stock, (vi) merge, consolidate or sell assets, and (vii) designate subsidiaries as unrestricted. These covenants are subject to a number of important exceptions and qualifications set forth in the Indentures.
Upon the occurrence of any event of default (other than certain bankruptcy or insolvency or reorganization events affecting AAG or certain of its subsidiaries, including American), the Notes may be declared to be due and payable immediately. Upon the occurrence of certain bankruptcy, insolvency or reorganization events affecting AAG or certain of its subsidiaries (including American), all outstanding Notes will become due and payable immediately without further action or notice on the part of the Trustee or any holder of the Notes.
CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
SHEET ARRANGEMENT OF A REGISTRANT.
The information provided in Item 1.01 under the captions “Treasury Loan Agreement” and “Private Notes Offering” is incorporated herein by reference to the extent responsive to Item 2.03.
UNREGISTERED SALES OF EQUITY SECURITIES.
The information provided in Item 1.01 under the caption, “Warrant Agreement and Warrants” is incorporated herein by reference to the extent responsive to Item 3.02.
Cautionary Statement Regarding Forward-Looking Statements
Certain of the statements contained in this report should be considered forward-looking statements within the meaning of the Securities Act, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” “estimate,” “plan,” “project,” “could,” “should,” “would,” “continue,” “seek,” “target,” “guidance,” “outlook,” “if current trends continue,” “optimistic,” “forecast” and other similar words. Such statements include, but are not limited to, statements about AAG’s plans, objectives,