UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 8.01 | Other Events |
2023 Note Repurchase
On June 1, 2023, KBR, Inc. (the “Company”) entered into separate, privately negotiated transactions with certain holders of its outstanding 2.50% Convertible Senior Notes due 2023 (the “2023 Notes”), pursuant to which the Company will repurchase approximately $100 million aggregate principal amount of the 2023 Notes (the “2023 Note Repurchases”). The price that the Company pays for the 2023 Note Repurchases will be based on the volume-weighted average price of the Company’s common stock, par value $0.001 per share (the “Common Stock”), during a ten-trading day measurement period ending on June 15, 2023. Calculated on the basis of the Common Stock’s closing price on the New York Stock Exchange on June 1, 2023, the aggregate repurchase price for the 2023 Notes would have been approximately $236 million. The actual price for the 2023 Note Repurchases will depend on the volume-weighted average price of the Common Stock during the agreed-upon measurement period.
The 2023 Note Repurchases are expected to close on or about June 16, 2023. The Company will cancel the repurchased 2023 Notes. Following the closing of the 2023 Note Repurchases, approximately $250 million in aggregate principal amount of 2023 Notes will remain outstanding, with terms unchanged.
Bond Hedge and Warrant Unwind Transactions
In connection with the 2023 Note Repurchases, the Company also entered into agreements with certain financial institutions (the “Option Counterparties”) to terminate corresponding portions of the convertible note hedge and warrant transactions the Company previously entered into with the Option Counterparties in connection with the issuance of the 2023 Notes. The respective unwind agreements provide for a payment by each Option Counterparty to the Company in respect of the convertible note hedge transactions, and by the Company to each Option Counterparty in respect of the warrant transactions, as applicable, in cash in an amount based on the volume-weighted average price for the Common Stock. In connection with such terminations, the Company anticipates that it will receive net proceeds from the Option Counterparties equal to approximately $48 million in aggregate, calculated on the basis of the Common Stock's closing price on the New York Stock Exchange on June 1, 2023, with the exact amount to be determined based on the volume-weighted average price of the Common Stock during the agreed-upon measurement period. In addition, the Company has amended the warrant transaction agreements with each of the Option Counterparties to provide that the Company may, at its option, elect cash settlement. Except as described herein, the portions of the convertible note hedge and warrant transactions not being terminated will remain outstanding and otherwise continue in accordance with their terms.
A copy of the Company’s press release announcing the transactions described above is filed herewith as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
| (d) | Exhibits | |||||||
| 99.1 | KBR, Inc. press release dated June 2, 2023, titled, “KBR Announces Agreements to Repurchase $100 Million Principal Amount of its $350 Million 2.50% Convertible Senior Notes Due November 1, 2023.” | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| KBR, INC. | ||||||||
| June 2, 2023 | /s/ Sonia Galindo | |||||||
| Sonia Galindo | ||||||||
| Executive Vice President, General Counsel & Corporate Secretary | ||||||||
HOUSTON – June 2,
2023 – KBR (NYSE: KBR) announced today that it has entered into separate, privately negotiated agreements to repurchase $100 million
principal amount of its outstanding $350 million, 2.50% Convertible Senior Notes due 2023 (the “Notes”) from certain holders
of the Notes. In connection with the Note repurchases, KBR also entered into partial unwind agreements with Bank of America, N.A., BNP
Paribas and Citibank, N.A. (collectively, the “Counterparties”) to terminate the corresponding portions of the convertible
note hedge and warrant transactions KBR previously entered into with the Counterparties in connection with the issuance of the Notes.
The transactions will result in a net outflow of roughly $188 million, subject to share price volatility as discussed below, and will
contain the cost of this proportion of the ultimate Notes maturity in November 2023. Following the closing of the repurchases, $250 million
in aggregate principal amount of Notes will remain outstanding, with terms unchanged.