Item 1.01
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Entry into a Material Definitive Agreement.
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On February 14, 2017, Ferro
Corporation (the Company) entered into the Credit Agreement (the Credit Agreement) with PNC Bank, National Association (PNC), as the Administrative Agent, the Collateral Agent and an Issuer, Deutsche Bank AG New
York Branch, as the Syndication Agent and an Issuer, the other agents party thereto and various financial institutions as lenders (the Lenders). The Credit Agreement replaces the Companys existing credit facility entered into on
July 31, 2014.
The Credit Agreement consists of a $400.0 million secured revolving line of credit with a term of five years, a
$357.5 million secured term loan facility with a term of seven years and a 250.0 million secured euro term loan facility with a term of seven years. Under the terms of the Credit Agreement, the Company is entitled, subject to the
satisfaction of certain conditions, to request additional commitments under the revolving line of credit or term loans in the aggregate principal amount of up to $250.0 million to the extent that existing or new lenders agree to provide such
additional commitments and/or term loans and certain additional debt subject to satisfaction of certain covenant levels.
Certain of the
Companys domestic subsidiaries have guaranteed the Companys obligations under the Credit Agreement and, pursuant to a Pledge and Security Agreement with PNC, as collateral agent, such obligations are secured by (a) substantially all
of the personal property of the Company and those certain domestic subsidiaries and (b) a pledge of 100% of the stock of certain of the Companys domestic subsidiaries (subject to certain exceptions) and 65% of the stock of certain of the
Companys direct foreign subsidiaries.
The interest rates per annum applicable to loans, other than the euro term loans, under the
Credit Agreement will be, at the Companys option, equal to either a base rate or a Eurocurrency rate (as defined in the Credit Agreement) or with respect to the euro term loans, a EURIBOR rate (as defined in the Credit Agreement) for one-,
two-, three- or six-month interest periods chosen by the Company, in each case plus an applicable margin. In the case of the U.S. term loans, 2.50% per annum in the case of the Eurocurrency rate term loans and 1.50% per annum in the case
of base-rate term loans, or, in the case of the euro term loans, 2.75% per annum in the case of EURIBOR rate loans. The applicable margin percentage for revolving loans and swingline loans is based on the ratio of (a) the Companys
total consolidated debt outstanding at such time to (b) the Companys Consolidated EBITDA (as defined in the Credit Agreement) computed for the period of four consecutive fiscal quarters most recently ended. The range of the applicable
margin percentage is 1.75% per annum to 2.75% per annum in the case of Eurocurrency rate revolving loans and 0.75% per annum to 1.75% per annum in the case of base-rate revolving loans.
Interest on base-rate loans is payable quarterly, and interest on Eurocurrency rate and EURIBOR rate loans is payable at the end of the
applicable Interest Period (as defined in the Credit Agreement). In addition to interest charges, the Company will pay a quarterly commitment fee ranging from 0.25% to 0.45% based on the ratio of (a) the Companys total consolidated debt
outstanding at such time to (b) the Companys Consolidated EBITDA computed for the period of four consecutive fiscal quarters most recently ended.
The Credit Agreement contains customary restrictive and financial covenants, including covenants
regarding the Companys outstanding indebtedness and, solely with respect to the Revolving Loans (as defined in the Credit Agreement), maximum leverage ratio. The Credit Agreement also contains standard provisions relating to conditions of
borrowing. In addition, the Credit Agreement contains customary events of default, including the non-payment of obligations by the Company and the bankruptcy of the Company. If an event of default occurs, all amounts outstanding under the Credit
Agreement may be accelerated and become immediately due and payable.
PNC and certain of the agents and Lenders party to the Credit
Agreement (and each of their respective subsidiaries or affiliates) have in the past provided, and may in the future provide, investment banking, cash management, underwriting, lending, commercial banking, trust, leasing services, foreign exchange
and other advisory services to, or engage in transactions with, the Company and its subsidiaries or affiliates. These parties have received, and may in the future receive, customary compensation from the Company and its subsidiaries or affiliates,
for such services.
The foregoing is a summary of the material terms and conditions of the Credit Agreement and not a complete description
of the Credit Agreement. Accordingly, the foregoing is qualified in its entirety by reference to the full text of the Credit Agreement attached to this Current Report as Exhibit 10.1, which is incorporated herein by reference.