(1) The
Senior Notes bear interest at a fixed rate. The variable interest
rate on the First Lien Term Loan and Senior Credit Facility
was 5.5%
and
9.5%,
respectively,
as of December 31, 2020.
On March 15, 2021, the Company completed a private offering by its
wholly-owned subsidiary, CPI CG Inc. (the “Issuer”), of $310,000
aggregate principal amount of 8.625% senior secured notes due 2026 (the “Senior
Notes”) and related guarantees. The notes and related guarantees
were offered and sold in a private transaction exempt from the
registration requirements of the Securities Act of 1933, as amended
(the “Securities Act”), to persons reasonably believed to be
qualified institutional buyers in accordance with Rule 144A under
the Securities Act and outside the United States to certain
non-U.S. persons in compliance with Regulation S under the
Securities Act. In addition, the Company and CPI CG Inc. as
borrower entered into a credit agreement with Wells Fargo Bank,
National Association, as lender, administrative agent and
collateral agent, providing for an asset-based, senior secured
revolving credit facility of up to $50,000 (the “ABL Revolver”).
In connection with the
issuance of the Senior Notes and entry into the ABL Revolver, the
Company terminated its existing credit facilities
consisting of a $30,000 senior credit agreement, dated as of March
6, 2020, among the Company, CPI CG Inc., as borrower, the lenders
party thereto and Guggenheim Credit Services, LLC as administrative
agent and collateral agent (the “Senior Credit Facility”), and a
$435,000 first lien term loan, dated as of August 17, 2015 as
amended, among the Company, the borrower, the lenders party
thereto, GLAS USA LLC, as administrative agent and GLAS Americas
LLC, as collateral agent (the “First Lien Term Loan”).
Net proceeds from the Senior Notes, together with cash on hand and
initial borrowings of $15,000 under the ABL Revolver, were used to pay in
full and terminate the Senior Credit Facility and First Lien Term
Loan on March 15, 2021, and to pay related fees and
expenses. As of
March 15, 2021, the Company had outstanding borrowings of
$30,000, plus accrued and
unpaid interest,
under the Senior Credit Facility, and $304,746, plus accrued and unpaid interest,
under the First Lien Term Loan. In addition, early
termination of the Senior Credit Facility required payment of a
“make-whole” premium of $2,635 as an early termination penalty, which was
paid on March 15, 2021, and recorded as interest expense on the
condensed consolidated statement of comprehensive income for the
nine months ended September 30, 2021.
During the second quarter of 2021, the Company used $15,000 of cash
on hand to pay down the ABL Revolver to zero and had no borrowings
outstanding thereunder as of September 30, 2021.
The Senior Notes bear interest at a
rate of 8.625%
per annum and mature on March 15,
2026. Interest is payable on the Senior Notes on March 15 and
September 15 of each year, beginning on September 15, 2021. The ABL
Revolver matures on the earliest to occur of March 15, 2026 and the
date that is 90 days
prior to the
maturity of the Senior Notes. Borrowings under the ABL Revolver
bear interest at a rate per annum that ranges from the LIBOR Rate
plus 1.25% to the LIBOR Rate plus 1.75%, or
the Base Rate plus 0.25% to the
Base Rate plus 0.75%, based on the average daily
borrowing capacity under the ABL Revolver over the most recently
completed month. The Base Rate as defined in the ABL Revolver is
the greater of the Federal Funds Rate plus 0.5%, the
LIBOR Rate for a one month interest period plus 1.0%, or the Wells Fargo Bank,
National Association “prime rate”. The Company may elect to apply
either the LIBOR Rate or Base Rate interest to borrowings at its
discretion. The unused portion of the ABL Revolver commitment
accrues a commitment fee, which ranges from 0.375% to 0.50% per
annum, based on the average daily borrowing capacity under the ABL
Revolver over the immediately preceding month.
The Senior Notes are guaranteed by the Company and certain of its
current and future wholly-owned domestic subsidiaries (other than
the Issuer) that guarantee the ABL Revolver, and are secured by
substantially all of the assets of the Issuer and the guarantors,
subject to customary exceptions. The ABL Revolver is guaranteed by
the Company and its subsidiaries (other than the Issuer and
excluded subsidiaries), and is secured by substantially all of the
assets of the Issuer and the guarantors, subject to customary
exceptions.
The Senior Notes and the ABL Revolver contain covenants limiting
the ability of the Company, the Issuer and the Company’s restricted
subsidiaries to, among other things, incur or guarantee additional
debt or issue disqualified stock or certain preferred stock; create
or incur liens; pay dividends, redeem stock or make other
distributions; make certain investments; create restrictions on the
ability of the Issuer and its restricted subsidiaries to pay
dividends to the Company or make other intercompany transfers;
transfer or sell assets; merge or consolidate; and enter into
certain transactions with affiliates, subject to a number of
important exceptions and qualifications as set forth in the
respective agreements.