Ritchie Bros. Holdings, a subsidiary of Ritchie Bros. Auctioneers, closed an offering of $550 million aggregate principal amount of 6.75% senior secured notes due March 15, 2028 and $800 million aggregate principal amount of 7.75% senior unsecured notes due March 15, 2031.
Ritchie Bros. intends to use the net proceeds from the offering of the notes, together with proceeds from its term loan A facility and cash from its balance sheet, to fund the cash portion of its previously announced merger with IAA; refinance IAA’s existing indebtedness,; repay or refinance all of Ritchie Bros.’ indebtedness, including Ritchie Bros.’ existing 5.375% senior notes due 2025; pay a one-time, special cash dividend to Ritchie Bros.’ shareholders; and pay related fees and expenses. The gross proceeds from the offering will be held in an escrow account pending the consummation of the merger.
The notes are the senior secured obligations of the Ritchie Bros. Holdings (the issuer), secured only by the amounts deposited in the applicable escrow account. Upon consummation of the merger, each series of notes will be, jointly and severally, fully and unconditionally guaranteed, on a senior unsecured basis, in the case of the unsecured notes, and on a senior secured basis, in the case of the secured notes, by Ritchie Bros. and each of the company’s subsidiaries (other than the issuer) that is a borrower, or guarantees indebtedness, under the company’s credit agreement or certain capital markets indebtedness, including the other series of notes. The secured notes and the unsecured notes bear interest at a rate equal to 6.75% and 7.75% per year, respectively, payable semiannually in arrears on March 15 and Sept. 15 of each year, beginning on Sept. 15, 2023, and mature on March 15, 2028, and March 15, 2031, respectively.
