place us at a competitive disadvantage compared to businesses in our industry that have less debt.
Additionally, any failure to meet required payments on our debt or to comply with any covenants in the instruments governing our debt, could result in an event of default under the terms of those instruments. In the event of such default, the holders of such debt could elect to declare all the amounts outstanding under such instruments to be due and payable.
Changes in our credit ratings may adversely affect the value of the Notes.
The ratings assigned to the Notes could be lowered, suspended or withdrawn entirely by the rating agencies if, in each rating agency’s judgment, circumstances warrant. Actual or anticipated changes or downgrades in our credit ratings, including any announcement that our ratings are under review for a downgrade, could affect the market value of the Notes. In particular, the interest rate payable on the Notes is subject to adjustment depending upon the ratings assigned to the Notes, as described under “Description of the Notes—Interest Rate Adjustment.”
We are a holding company and depend on dividends and other distributions from our subsidiaries.
We are a holding company with limited direct operations. Our principal assets are the equity interests that we hold in our subsidiaries. As a result, we depend on dividends and other distributions from our subsidiaries to generate the funds necessary to meet our financial obligations, including the payment of principal and interest on our outstanding indebtedness. Our subsidiaries are legally distinct from us and have no obligation to pay amounts due on our indebtedness or to make funds available for such payment. In addition, our subsidiaries will be permitted under the terms of the Indenture governing the Notes to incur additional indebtedness that may restrict or prohibit the making of distributions, the payment of dividends or the making of loans by such subsidiaries to us. We cannot assure you that the agreements governing the current and future indebtedness of our subsidiaries will permit our subsidiaries to provide us with sufficient dividends, distributions or loans to fund payments on the Notes when due.
If we complete the planned separation of the Technip Energies business, we will not be able to rely on the earnings, assets or cash flows of Technip Energies for working capital or other cash requirements, and our ability to service our debt, including the Notes offered hereby, may be adversely affected.
On August 26, 2019, we announced that our Board of Directors had unanimously approved a plan to separate our Onshore/Offshore segment and our loading systems and process automation businesses into an independent, publicly traded company. In connection with the planned transaction, we renamed our Onshore/Offshore segment (including our loading systems business that was previously reported in the Surface Technologies segment and our process automation business, Cybernetix, that was previously reported in the Subsea segment) to Technip Energies in the first quarter of 2020. Due to the COVID-19 pandemic, the sharp decline in commodity prices, and the heightened volatility in global equity markets, on March 15, 2020, we announced the postponement of the completion of the transaction until the markets sufficiently recover. The transaction will be subject to general market conditions, regulatory approvals, consultation of employee representatives, where applicable, and final approval from our Board of Directors. Following the completion of the planned separation, Technip Energies would be an independent, standalone, publicly traded company. See Note 3 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2019 and Note 2 to the consolidated financial statements in each of our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020.
Historically, we have benefited from our ownership of the Technip Energies business. Following completion of the planned separation, we will not be able to rely on the earnings, assets or cash flow of Technip Energies, and Technip Energies will not provide funds to finance our working capital or other cash requirements. As a result of the planned separation, our ability to service our debt, including the Notes offered hereby, may be adversely affected.
The Indenture will not restrict our ability to consummate the planned separation.
The Notes are structurally subordinated to the obligations of our subsidiaries, which may affect your ability to receive payments on the Notes.
The Notes will be our direct obligations. Our subsidiaries are separate legal entities and have no obligation to pay any amounts due on the Notes or, subject to any existing or future contractual obligations between us and our subsidiaries, to provide us with funds for our payment obligations, whether by dividends, distributions, loans