Item 1.01. Entry into a Material Definitive Agreement.
On May 18, 2018, Mohawk Capital Finance S.A. (Mohawk Finance), an indirect wholly-owned subsidiary of Mohawk Industries, Inc.,
(the Company) that provides financing for the Company through the issuance of debt securities, completed the issuance and sale of 300,000,000 aggregate principal amount of its Floating Rate Notes due 2020 (the Notes) in
a previously announced registered public offering. The offering of the Notes was made pursuant to the Companys and Mohawk Finances shelf registration statement on Form
S-3,
as amended by
Post-Effective Amendment No. 1 thereto (File
Nos. 333-219716
and
333-219716-02)
filed with the Securities and Exchange
Commission on September 1, 2017 and a preliminary prospectus supplement, dated May 14, 2018, and a prospectus supplement, dated May 14, 2018, related to the offering of the Notes, each as filed with the Securities and Exchange
Commission.
The Notes are senior unsecured obligations of Mohawk Finance and will rank equally in right of payment with all of Mohawk
Finances other existing and future senior unsecured indebtedness. The Notes are fully, unconditionally and irrevocably guaranteed by the Company on a senior unsecured basis (the Guarantee and, together with the Notes, the
Securities).
The Securities were issued pursuant to an Indenture dated as of September 11, 2017 among Mohawk Finance, as
issuer, the Company, as parent guarantor, and U.S. Bank National Association, as trustee (the Trustee) (the Base Indenture), as supplemented by a Second Supplemental Indenture dated as of May 18, 2018 among Mohawk
Finance, as issuer, the Company, as the parent guarantor, the Trustee, as trustee, registrar and transfer agent, and Elavon Financial Services DAC, UK Branch, as paying agent (the Supplemental Indenture and, together with the Base
Indenture, the Indenture).
The Notes will bear interest at a rate per annum, reset quarterly, equal to three-month EURIBOR
plus 0.30% (but in no event shall the interest rate be less than zero). Interest on the Notes is payable quarterly on August 18, November 18, February 18 and May 18 of each year, commencing on August 18, 2018, and the Notes
mature on May 18, 2020.
The Notes are not redeemable prior to maturity, except that Mohawk Finance may redeem the Notes in whole,
but not in part, at its option, in the event of certain developments affecting the United States, Luxembourg or other applicable taxing jurisdiction on the terms set forth in the Indenture. Additionally, the holders of the Notes have the right to
require Mohawk Finance to purchase all or a portion of their Notes upon certain changes in control of the Company or Mohawk Finance, as defined in the Indenture.
The Indenture contains certain covenants that, among other things and subject to a number of exceptions and qualifications, limit the
Companys ability and the ability of its subsidiaries, including Mohawk Finance, to create liens and to enter into sale and leaseback transactions and limit the Companys ability to consolidate, merge or transfer all or substantially all
of its assets. The Indenture also contains certain customary events of default, including failure to make payments in respect of the principal amount of the Notes, failure to make payments of interest on the Notes when due and payable, failure to
comply with certain covenants and agreements and certain events of bankruptcy or insolvency.
The foregoing summary is qualified in its
entirety by reference to the full text of the Base Indenture, the Supplemental Indenture and the global note which are filed as Exhibits 4.1, 4.2 and 4.3 to this Current Report on Form
8-K
and are incorporated
by reference herein.
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