Item 1.01
|
Entry Into a Material Definitive Agreement
|
On December 1, 2017, the Company entered into the
Second Amended and Restated Credit Agreement, dated as of December 1, 2017 (the Credit Agreement), among the Company, the lenders from time to time party thereto and Bank of America, N.A., as Administrative Agent, Swing Line Lender
and L/C Issuer.
The Credit Agreement amends, restates and replaces the Companys existing Credit Agreement, dated as of February 1, 2016 (as
amended from time to time prior to February 1, 2016, the Prior Credit Agreement), pursuant to which the Company obtained a $900,000,000 revolving credit facility (the Revolving Facility), a $295,000,000 term A loan (the
Term A Loan), a $190,000,000 tranche
A-1
term loan (the Tranche
A-1
Term Loan), and a $1,025,000,000 tranche
A-2
term loan (the Tranche
A-2
Term Loan and, together with the Term A Loan and the Tranche
A-1
Term Loan, the
Term Loans). Pursuant to the Credit Agreement the Company (i) continued and extended the maturity of the Revolving Facility and the Tranche
A-1
Term Loan, (ii) decreased the aggregate
size of the Revolving Facility to $750,000,000, (iii) increased the aggregate size of the Term A Loan to $500,000,000 and (iv) discontinued the Tranche
A-2
Term Loan and converted all outstanding Tranche
A-2
Term Loan amounts to the Tranche
A-1
Term Loan such that the aggregate size of the Tranche
A-1
Loan is now $900,000,000.
The Revolving Facility and the Tranche
A-1
Term Loan mature on February 1, 2023. The initial pricing for the
Revolving Facility and the Tranche
A-1
Term Loan is determined by LIBOR plus a margin of 1.40%. Thereafter, the Revolving Facility and the Tranche
A-1
Term Loan will
bear interest at a rate per annum equal to (i) LIBOR plus a margin ranging from 1.20% to 1.60% based on the Companys consolidated net leverage ratio or corporate credit rating (whichever produces lower pricing) or (ii) a Base Rate
(as defined in the Credit Agreement) plus a margin ranging from 0.20% to 0.60% based on the Companys consolidated net leverage ratio or corporate credit rating (whichever produces lower pricing). The Company will also pay an unused fee on the
Revolving Facility ranging from 0.20% to 0.30% based on the Companys consolidated net leverage ratio or corporate credit rating (whichever produces lower pricing), with the initial unused fee set at 0.25%. The Revolving Facility includes
sub-facilities
for swing line loans and letters of credit.
The Term A Loan matures on February 1, 2025. The
initial pricing for the Term A Loan is determined by LIBOR plus a margin of 1.875%. Thereafter, the Term A Loan will bear interest at a rate per annum equal to (i) LIBOR plus a margin ranging from 1.675% to 2.075% based on the Companys
consolidated net leverage ratio or corporate credit rating (whichever produces lower pricing) or (ii) a Base Rate (as defined in the Credit Agreement) plus a margin ranging from 0.675% to 1.075% based on the Companys consolidated net
leverage ratio or corporate credit rating (whichever produces lower pricing); provided that the Company and Term A Loan lenders may agree to a quoted fixed rate for the Term A Loan at a future date.
The Credit Agreement contains substantially the same covenants as the Prior Credit Agreement other than the elimination of the consolidated cash interest
coverage ratio covenant contained in the Prior Credit Agreement. The covenants include a financial covenant requiring that the Company maintains a certain consolidated net leverage ratio and other covenants, including with respect to limitations on
liens, investments, indebtedness, mergers, consolidations and acquisitions, dispositions of assets, restricted payments, changes in the nature of the Companys business, transactions with affiliates, burdensome agreements, use of proceeds, sale
and leaseback transactions and amendments to organizational documents. The Credit Agreement also contains customary representations, warranties and events of default.
The Companys obligations under the Credit Agreement are guaranteed by substantially all of its wholly-owned domestic subsidiaries.
The descriptions of the Credit Agreement set forth above are qualified in their entirety by reference to the Credit Agreement filed as Exhibit 10.1 to this
Current Report on
Form8-K and
incorporated by reference herein