Item 1.01. Entry into a Material Definitive Agreement.
On September 20, 2019, Raven Industries, Inc. (the “Company”) and certain of its domestic subsidiaries, as guarantors, entered into a Credit Agreement with Bank of America, N. A, as Administrative Agent, Swingline Lender, and L/C Issuer, and Wells Fargo Bank, National Association (the “Credit Agreement”), which provides for a syndicated senior revolving credit facility in an aggregate amount of up to $100,000,000. BofA Securities, Inc., acted as sole lead arranger and sole bookrunner. This new syndicated credit facility replaces the Company’s existing credit agreement, which has been terminated. The Company had no outstanding borrowings under its existing credit agreement prior to termination. In addition, certain of the Company's domestic subsidiaries guarantee the obligations of the Company under the Credit Agreement. From time to time, the Company may be required to cause additional domestic subsidiaries to become guarantors under the Credit Agreement.
Loans made under this Credit Agreement mature on September 20, 2022. The loan proceeds will be utilized by the Company for strategic business purposes and for working capital needs. Interest and fees on each loan are payable at variable rates calculated as specified in the Credit Agreement, based on the ratio of funded indebtedness to EBITDA on the last day of any fiscal quarter. The Credit Agreement also permits the issuance of letters of credit and swingline loans.
The Credit Agreement contains customary covenants, including covenants relating to financial reporting and notifications, payment of obligations, and compliance with applicable laws. There also are financial covenants that require the Company to maintain a ratio of EBITDA to interest expense for any period of four consecutive fiscal quarters ending on the last day of any fiscal quarter of not less than 3.5 to 1.0, and a ratio of funded indebtedness to EBITDA on the last day of any fiscal quarter of not greater than 3.5 to 1.0.
The Credit Agreement also imposes certain customary limitations and requirements on the Company with respect to the incurrence of indebtedness and liens, investments, mergers, acquisitions and dispositions of assets. Amounts due under the Credit Agreement may be accelerated upon an event of default, as described in the Credit Agreement, such as breach of a representation, covenant or agreement of the Company or the occurrence of bankruptcy, if not otherwise waived or cured.
The foregoing description of the Credit Agreement and any of its provisions is qualified in its entirety by reference to the Credit Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
In addition, on September 23, 2019, the Company issued a press release, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference.