Item 1.01 Entry
into a Material Definitive Agreement.
The information set forth under Item
2.03 of this Current Report on Form 8-K is incorporated herein by
reference.
Item 2.03 Creation
of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
Amendment to
Senior Unsecured Term Loan Facility and Senior Unsecured Revolving
Facility
On September 9, 2021, Advanced Energy
Industries entered into an agreement to amend its existing credit
agreement to extend the term to five years, increase its unsecured
Term Loan to $400 million and increase the undrawn revolving line
of credit to $200 million under substantially the same terms as the
original agreement. The increased capacity and duration of
the amendment provides Advanced Energy additional flexibility for
growth, share repurchase and other corporate needs while leveraging
the existing debt agreement and financing terms.
Under the agreement, Advanced Energy
Industries, Inc., a Delaware corporation (the “Company”), and
material domestic subsidiaries of the Company acting as guarantors
(the “Guarantors”), entered into Amendment No. 1 to the Credit
Agreement (the “Amendment”) that amends that Credit Agreement,
dated September 10, 2019, entered into with (i) the Guarantors,
(ii) the banks and financial institutions listed in the Credit
Agreement, as lenders, (iii) Bank of America, N.A., Bank of the
West, and HSBC Bank USA, N.A., as joint lead arrangers and joint
book runners, and (iv) Citibank, N.A., as co-manager (the “Credit
Agreement”). The Credit Agreement provided aggregate
financing of $500.0 million, consisting of a $350.0 million senior
unsecured term loan facility with a term of five years (the “Term
Loan Facility”) and a $150.0 million senior unsecured revolving
facility with a term of five years (“Revolving Facility”).
Immediately prior to entering into the Amendment, the
principal amount outstanding under the Term Loan Facility was
$315.0 million. The Company has not drawn upon the Revolving
Facility.
The Amendment (a) increased the
commitment under the Term Loan Facility and borrowed $85.0 million,
such that the Company’s total principal amount outstanding
thereunder is $400.0 million, (b) increased the commitment under
the Revolving Facility by $50.0 million for a total of $200.0
million in aggregate, all of which is currently available, (c)
revised the amortization schedule for the Term Loan Facility, (d)
extended the maturity dates of the Term Loan Facility and Revolving
Facility to September 9, 2026 from the original maturity dates of
September 10, 2024, (e) added certain LIBOR transition provisions,
(f) added a “covenant holiday” provision pursuant to which the
current consolidated leverage of 3.00 to 1.00 can be increased to
3.50 to 1.00 for up to two material acquisitions of $150.0 million
or greater in purchase price for a period of 12 months after any
such acquisition, and (g) provided for other customary changes as
more fully set forth in the Amendment. In conjunction with the
agreement, Citibank N.A. increased its position to replace Bank of
the West.
The foregoing summary of the
Amendment and Credit Agreement is not complete and is qualified in
its entirety by reference to (1) the Credit Agreement, which was
filed as Exhibit 10.1 to the Current Report on Form 8-K filed by
the Company with the Securities and Exchange Commission (the “SEC”)
on September 10, 2019, and (2) the Amendment, which is filed as
Exhibit 10.2 to this Current Report on Form 8-K, all of which are
incorporated herein by reference.