Item 1.01
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Entry into a Material Definitive Agreement
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Amendment of Term Loan
On June 8, 2018, Generac Power Systems, Inc. (the “Borrower”), a wholly owned subsidiary of Generac Holdings, Inc. (the “Company”), amended that certain Term Loan Credit Agreement dated as of February 9, 2012 (as amended and/or restated, supplemented, or otherwise modified from time to time, the “Term Loan Credit Agreement”), which amendment modified the pricing for the term loan thereunder (the “Term Loan”) by favorably reducing certain applicable margin rates, among other items. Previously, the Term Loan accrued interest at a per annum rate equal to LIBOR plus an applicable margin of 2.00%, and a LIBOR floor of 0.75%. Effective with this amendment, the Term Loan will accrue interest at a per annum rate equal to LIBOR plus an applicable margin of 1.75%, and a LIBOR floor of 0.75%. Concurrent with this amendment, the Borrower is also paying down $50.0 million on the existing balance of $929.0 million for a new outstanding balance of $879.0 million. The Term Loan amendment is attached hereto as Exhibit 10.1 and incorporated herein by reference. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to such exhibit.
Amendment and Restatement of ABL Revolving Credit Facility
On June 12, 2018, the Borrower entered into a Second Amended and Restated Credit Agreement (as amended and/or restated, supplemented, or otherwise modified from time to time, (the “ABL Credit Agreement”), among the Borrower, Generac Holdings UK Limited, as U.K. Borrower, certain domestic subsidiaries of the Borrower, Generac Acquisition Corp., the lenders party thereto, Bank of America, N.A., as Administrative Agent, JPMorgan Chase Bank, N.A., as syndication agent, and Wells Fargo Bank, National Association, as Documentation Agent.
The ABL Credit Agreement provides for a three-year extension of the maturity date in respect of the senior secured ABL revolving credit facility provided thereunder (the “ABL Facility”), as well as an increase in the size of the ABL Facility from $250.0 million to $300.0 million. Up to $50.0 million of the ABL Facility can be used by the U.K. Borrower for borrowings in U.S. Dollars, Euros, and/or Pound Sterling. Subject to the terms of the ABL Credit Agreement, the extended maturity date of the ABL Facility is June 12, 2023. The ABL Credit Agreement further provides for an increase in the Letter of Credit sublimit under the ABL Facility from $25.0 million to $75.0 million, and a favorable pricing reduction in certain applicable interest rates, among other items. Borrowings under the ABL Facility previously bore interest at a per annum rate based upon LIBOR plus an applicable margin of between 1.25% and 1.75%, but will now bear interest at a per annum rate based upon LIBOR plus an applicable margin of between 1.125% and 1.375%, in each case subject to adjustments based upon average availability under the ABL Facility.
The ABL Credit Agreement is attached hereto as Exhibit 10.2 and incorporated herein by reference. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to such exhibit.