Item 1.01 Entry into a Material Definitive Agreement.
On February 19, 2020, Hecla Mining Company (the "Company") completed its
offering and sale of $475.0 million aggregate principal amount of the Company's
7.250% Senior Notes due 2028 (the "Notes"). The offering and sale of the Notes
(the "Offering") were made pursuant to the Company's shelf registration
statement (Registration No. 333-229803) previously filed with the Securities and
Exchange Commission (the "SEC") and a prospectus supplement dated February 13,
2020 that was filed with the SEC on February 18, 2020.
The Notes were issued pursuant to the Indenture, dated as of February 19, 2020
(the "Base Indenture"), by and among the Company and The Bank of New York Mellon
Trust Company, N.A., as trustee (the "Trustee"), as supplemented by the First
Supplemental Indenture, dated as of February 19, 2020 (the "Supplemental
Indenture"), by and among the Company, certain of the Company's subsidiaries
listed on the signature pages thereto (collectively, the "Guarantors") and the
Trustee.
The Notes bear interest at a rate of 7.250% per year from the date of original
issuance or from the most recent payment date to which interest has been paid or
provided for. Interest on the Notes is payable on February 15 and August 15 of
each year, commencing August 15, 2020. The Guarantors and each of the Company's
future restricted subsidiaries that guarantee the Company's indebtedness or
indebtedness of subsidiary guarantors will guarantee the Notes on a senior
unsecured basis, subject to certain exceptions (such guarantees collectively,
the "Guarantees"). The Notes and the Guarantees will be the general senior
unsecured obligations of the Company and the Guarantors, respectively, and will
be subordinated to all of the existing and future secured debt of the Company
and the Guarantors, respectively, to the extent of the assets securing that
secured debt. In addition, the Notes will be effectively subordinated to all of
the liabilities of the Company's subsidiaries that are not guaranteeing the
Notes, to the extent of the assets of those subsidiaries.
The Notes will be redeemable in whole or in part, at any time and from time to
time on or after February 15, 2023, on the redemption dates and at the
redemption prices specified in the Supplemental Indenture, plus accrued and
unpaid interest, if any, to the date of redemption. Prior to February 15, 2023,
the Company may redeem some or all of the Notes at a redemption price of 100% of
the principal amount, plus accrued and unpaid interest, if any, to the
redemption date, plus a "make whole" premium set forth in the Supplemental
Indenture. The Company may redeem up to 35% of the Notes prior to February 15,
2023 with the net cash proceeds from certain equity offerings. Each of such
optional redemption provisions referred to above are described in greater detail
in the Supplemental Indenture.
Upon the occurrence of a change of control (as defined in the Supplemental
Indenture), each holder of Notes will have the right to require the Company to
purchase all or a portion of such holder's Notes pursuant to a change of control
offer (as defined in the Indenture), at a purchase price equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase, subject to the rights of holders of the Notes on the relevant
record date to receive interest due on the relevant interest payment date.
If an event of default with respect to the Notes occurs, the principal amount of
the Notes, plus premium, if any, and accrued and unpaid interest may be declared
immediately due and payable, subject to certain conditions. These amounts
automatically become due and payable in the case of certain types of bankruptcy,
insolvency or reorganization events of default involving the Company.
2
--------------------------------------------------------------------------------
The foregoing is a summary of the material terms and conditions of the Base
Indenture, as supplemented by the Supplemental Indenture, and is not a complete
discussion. Accordingly, the foregoing is qualified in its entirety by reference
to the full text of the Base Indenture and the Supplemental Indenture, which are
filed as Exhibits 4.1 and 4.2, respectively, to this Current Report on Form 8-K,
each of which is incorporated herein by reference. A form of Note is included as
Exhibit 4.3 and incorporated herein by reference.
Item 1.02 Termination of a Material Definitive Agreement.
The information in Item 8.01 of this Current Report on Form 8-K under the
heading "Redemption of 6.875% Senior Notes due 2021" with respect to the
Indenture, dated as of April 12, 2013 (as supplemented to date, the "2013
Indenture"), by and among the Company, the subsidiaries of the Company party
thereto and The Bank of New York Mellon Trust Company, N.A., as trustee (the
"2021 Notes Trustee"), as supplemented by (i) the Supplemental Indenture, dated
as of April 14, 2014, by and among the Company, the subsidiaries of the Company
listed on the signature pages thereto and the 2021 Notes Trustee, (ii) the
Supplemental Indenture, dated as of August 5, 2015, by and among the Company,
the subsidiaries of the Company listed on the signature pages thereto and the
2021 Notes Trustee, (iii) the Supplemental Indenture, dated as of October 26,
2016, by and among the Company, the subsidiaries of the Company listed on the
signature pages thereto and the 2021 Notes Trustee, (iv) the Supplemental
Indenture, dated as of November 30, 2018, by and among the Company, the
subsidiaries of the Company listed on the signature pages thereto and the 2021
Notes Trustee, and (v) the Supplemental Indenture, dated as of September 16,
2019, by and among the Company, the subsidiaries of the Company listed on the
signature pages thereto and the 2021 Notes Trustee, is incorporated herein by
reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information in Item 1.01 of this Current Report on Form 8-K is incorporated
herein by reference.
Item 8.01 Other Events.
Underwriting Agreement
On February 13, 2020, the Company and the Guarantors executed and delivered an
underwriting agreement (the "Underwriting Agreement"), by and among the Company,
the Guarantors and J.P. Morgan Securities LLC, as representative of the
underwriters named therein (the "Underwriters"), relating to the Offering. Under
the terms of the Underwriting Agreement, the Company has agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended, and to contribute payments that the
Underwriters may be required to make because of any of those liabilities. A copy
of the Underwriting Agreement is filed as Exhibit 1.1 to this Current Report on
Form 8-K and is incorporated herein by reference.
Opinions of Counsel
Opinions of the Company's counsel relating to the validity of the Notes and the
Guarantees issued and sold in the Offering are filed herewith as Exhibits 5.1,
5.2, 5.3, 5.4, 5.5 and 5.6.
3
--------------------------------------------------------------------------------
Redemption of 6.875% Senior Notes due 2021
On February 19, 2020, the Company issued a notice of redemption with respect to
all of its outstanding 6.875% Senior Notes due 2021 (the "2021 Notes"). In
addition, on February 19, 2020, the Company deposited with the 2021 Notes
Trustee a sufficient amount of funds, which includes the net proceeds of the
Offering together with cash on hand, to cause the satisfaction and discharge of
the respective obligations of the Company and each guarantor of the 2021 Notes
under the 2013 Indenture and the 2021 Notes.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
1.1 Underwriting Agreement, dated as of February 13, 2020, by and
among Hecla Mining Company, the Guarantors named therein and J.P.
Morgan Securities LLC, as representative of the several underwriters
named therein.*
4.1 Indenture, dated as of February 19, 2020, by and among Hecla
Mining Company and The Bank of New York Mellon Trust Company, N.A.,
as trustee.*
4.2 First Supplemental Indenture, dated as of February 19, 2020, by
and among Hecla Mining Company, the Guarantors named therein and The
Bank of New York Mellon Trust Company, N.A., as trustee.*
4.3 Form of 7.250% Senior Note due 2028 (included in Exhibit 4.2).
5.1 Opinion of Sheppard, Mullin, Richter & Hampton LLP.*
5.2 Opinion of K&L Gates LLP.*
5.3 Opinion of Michael Clary, Esq.*
5.4 Opinion of Erwin Thompson Faillers.*
5.5 Opinion of Cassels Brock & Blackwell LLP.*
5.6 Opinion of Crowley Fleck PLLP.*
23.1 Consent of Sheppard, Mullin, Richter & Hampton LLP (included in
Exhibit 5.1).
23.2 Consent of K&L Gates LLP (included in Exhibit 5.2).
104 Cover Page Interactive Data File (formatted as Inline XBRL and
contained in Exhibit 101).
* Filed herewith
4
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses