Item 1.01. Entry Into a Material Definitive Agreement.
On November 18, 2016, certain direct and indirect subsidiaries of GMS Inc. (the “Company”) entered into a Second Amendment to ABL Credit Agreement (the “Second Amendment”) which amends that certain ABL Credit Agreement, dated April 1, 2014 (as amended by that certain First Amendment to ABL Credit Agreement, dated as of February 17, 2016, the “Credit Agreement”), among GYP Holdings III Corp., as borrower, GYP Holdings II Corp., the lenders party hereto and Wells Fargo Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”) and collateral agent for the lenders from time to time party thereto, and as Swing Line Lender (as defined in the Credit Agreement) and L/C Issuer (as defined in the Credit Agreement).
The Second Amendment amended the Credit Agreement to, among other things, (i) increase the Revolving Credit Commitments thereunder from $300,000,000 to $345,000,000, and (ii) extend the maturity date of the Credit Agreement from April 1, 2019 to the earlier of
(a) November 18, 2021 and (b) the date of termination in whole of the Credit Agreement and the obligations thereunder.
The Second Amendment also amended the interest rate margin applicable to loans borrowed under the Credit Agreement in accordance with the schedule set forth below:
|
Applicable Rate
|
|
Pricing Level
|
Average Daily Availability
|
Eurodollar Rate
|
Base Rate
|
|
1
|
< 33.33%
|
1.75%
|
0.75%
|
|
2
|
>
33.33%, but < 66.7%
|
1.50%
|
0.50%
|
|
3
|
>
66.7%
|
1.25%
|
0.25%
|
The revised pricing reflects a 0.25% decrease in interest rate margin at each Pricing Level (as defined in the Credit Agreement) relative to the interest rate margins charged at the corresponding Pricing Levels under the Credit Agreement. Pricing Level 2 will apply until January 31, 2017, and thereafter, interest will accrue as otherwise set forth in the schedule above.
The Second Amendment was subject to various conditions and contains various representations and warranties, including no default or event of default under the Loan Documents (as defined in the Credit Agreement) and bring-downs of the representations and warranties made by the Loan Parties (as defined in the Credit Agreement) in the Loan Documents.
The foregoing description of the Second Amendment does not propose to be complete and is qualified in its entirety by reference to the full text of the Second Amendment, a copy of which is attached hereto as Exhibit 10.1, and the terms of which are incorporated herein by reference.