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Item 1.01
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Entry into a Material Definitive Agreement.
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Amendment to Credit Agreement
On February 21, 2018, Commercial Metals Company (the “
Company
”) and CMC International Finance S.à R.L., its
wholly owned subsidiary, entered into a Joinder Agreement and Fifth Amendment (the “
Amendment
”) to the Fourth Amended and Restated Credit Agreement (as amended, the “
Credit Agreement
”) with Bank of
America, N.A., as Administrative Agent (“
Bank of America
”), Swing Line Lender and L/C Issuer, the lenders from time to time party thereto, Wells Fargo Bank, National Association, Citibank, N.A. and PNC Bank, National
Association as
Co-Syndication
Agents, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Bank, National Association, PNC Bank, National Association and Citibank, N.A. as Joint Lead
Arrangers and Joint Book Managers.
The Amendment amends the Credit Agreement to, among other things, provide for a coterminous delayed
draw term loan facility in the maximum aggregate principal amount of up to $200.0 million (the “
2018 Term Loan
”), the proceeds of which are required to be used to (i) finance the acquisition by the Company of
certain assets of the business, and certain outstanding common stock, belonging directly or indirectly to GNA Financing, Inc., a Delaware corporation, or certain of its subsidiaries and affiliates (collectively, the
“
Target
”), pursuant to the Company’s previously disclosed Stock and Asset Purchase Agreement, dated as of December 29, 2017, with the Target (the “
Contemplated Acquisition
”), (ii) repay
certain existing indebtedness of the Target and its subsidiaries and (iii) pay transaction fees and expenses related thereto.
The
2018 Term Loan will mature on June 23, 2022 and generally will bear interest on the same terms and conditions as the existing term loans under the Credit Agreement. The 2018 Term Loan will be jointly and severally guaranteed by all of the
Company’s subsidiaries that guarantee its indebtedness under the Credit Agreement and will be secured by first-priority liens on the Company’s U.S. inventory and the Company’s U.S. receivables originated by its steel fabricating
business.
As provided in the Credit Agreement, to the extent the 2018 Term Loan is not repaid earlier, the Company will be required to
make principal payments on the 2018 Term Loan in quarterly installments in an amount equal to 1.25% of the original drawn principal amount after giving effect to any prepayments. Such principal payments will be due on the last business day of each
of the Company’s fiscal quarters following the funding date of the 2018 Term Loan for the life of the 2018 Term Loan.
As previously
disclosed, on December 29, 2017, the Company entered into a Commitment Letter with Bank of America, Merrill Lynch, Pierce, Fenner & Smith Incorporated and certain other commitment parties named therein (the “
Commitment
Parties
”), pursuant to which the Commitment Parties agreed to provide the Company with a senior secured term loan B facility in the aggregate principal amount of up to $600.0 million (the “
Term Loan B
Facility
”) to fund all or a portion of the purchase price for the Contemplated Acquisition and pay certain fees and expenses in connection therewith. In connection with the entry into the 2018 Term Loan, the commitments under the Term
Loan B Facility were reduced from $600.0 million to $400.0 million.
The foregoing description of the Amendment does not purport
to be complete and is qualified in its entirety by the Amendment, a copy of which is filed as Exhibit 10.1 to this Current Report on Form
8-K
and is incorporated herein by reference.