Johnson Controls Inc. (JCI) has announced that Adient, the automotive seating and interiors business it plans to spin-off on Oct. 31, as priced $900 million aggregate principal amount of 4.875 percent dollar-denominated unsecured notes due 2026 and €1 billion aggregate principal amount of 3.5 percent euro-denominated unsecured notes due 2024, in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended. The closing of the offering is expected to occur on or about Aug. 19, 2016, subject to customary closing conditions.
The notes are being issued by Adient Global Holdings Ltd., a wholly owned subsidiary of Johnson Controls that will be transferred to Adient in connection with the planned spin-off. The net proceeds of the offering are intended to be used to make cash transfers to Johnson Controls in connection with the spin-off. Adient will use any remaining proceeds for general corporate purposes.
In addition, Johnson Controls announced that, following the consummation of its merger with a subsidiary of Tyco International plc and the spin-off of Adient, Johnson Controls intends to explore alternatives for its outstanding debt securities, which could include, among other items, an exchange offer of its outstanding unsecured, unsubordinated registered notes for unsecured, unsubordinated notes of Tyco International Finance S.A. However, any decision to pursue such an alternative will be taken by the board of directors of the combined company only after the consummation of the merger and the spin-off and consideration of market conditions.
