Item 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Amended and Restated Credit Agreement
On August 17, 2021, Republic Services, Inc. (the “Company”) entered into an Amended and Restated Credit Agreement, with Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer (the “Administrative Agent”) and the other lenders party thereto (the “Credit Agreement”). The Credit Agreement amends and restates the Company’s prior Credit Agreement, dated as of June 8, 2018, with Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer and the other lenders party thereto, as amended.
The Credit Agreement is unsecured and will mature in August 2026. Under the Credit Agreement, each lender agrees to make loans to the Company in an aggregate amount not to exceed the amount of such lender’s commitment set forth in the Credit Agreement with the total outstanding principal amount under the Credit Agreement not to exceed the current aggregate lenders’ commitments of $3.0 billion, as such amounts may be adjusted from time to time in accordance with the Credit Agreement. The Company may request two one-year extensions of the maturity date, but none of the lenders are committed to participate in such extensions. The Credit Agreement includes a feature that allows the Company to increase availability under the facility, at the Company’s option, by an aggregate amount of up to $1.0 billion, through increased commitments from existing lenders or the addition of new lenders, subject to obtaining additional commitments and other customary conditions.
At the Company’s option, and subject to customary conditions, borrowings bear interest at a base rate, a daily floating London Interbank Offered Rate (“LIBOR”) rate or a Eurodollar rate, plus an applicable margin based on the Company’s debt ratings. On the earliest of (i) the date that all available tenors of U.S. dollar LIBOR have permanently or indefinitely ceased to be provided or have been announced to be no longer representative, (ii) June 30, 2023 or (iii) the effective date of an election to opt into a secured overnight financing rate (“SOFR”), the LIBOR rate will be replaced by a forward-looking term rate based on SOFR or a daily rate based on SOFR published on such date. After the effective date of the Credit Agreement, the Company, in consultation with one or more lenders selected by the Company to be the sustainability coordinator under the Credit Agreement (the “Sustainability Coordinator”), will be entitled to establish specified key performance indicators (“KPIs”) with respect to certain environmental, social and governance targets of the Company and its subsidiaries. The Sustainability Coordinator, the Company and the Administrative Agent may amend the Credit Agreement, unless such amendment is objected to by lenders holding more than 50% of the commitments under the Credit Agreement, solely for the purpose of incorporating the KPIs so that certain adjustments to the otherwise applicable facility fee or interest rate may be made based on the Company’s performance against the KPIs.
Available amounts subject to outstanding letters of credit, and outstanding principal, accrued and unpaid interest and other amounts payable under the facility, may be accelerated upon the occurrence of customary events of default, including (subject to certain materiality thresholds and grace periods) payment defaults, failures to comply with covenants, material inaccuracies of representations or warranties, bankruptcy or insolvency proceedings, changes of control, ERISA matters and cross-defaults to other debt agreements.
The Credit Agreement contains customary affirmative and negative covenants, including, among other things, a covenant requiring the Company not to exceed a maximum ratio of total debt to EBITDA, as defined in the Credit Agreement. The Company may pay dividends and repurchase common stock if it is in compliance with these covenants.
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