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Item 1.01
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Entry into a Material Definitive Agreement.
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Fourth Amended and Restated Loan and Security Agreement
On June 25, 2021, U.S. Concrete, Inc. (the “Company”) and certain of its subsidiaries, as co-borrowers and as guarantors, entered into the Fourth Amended and Restated Loan and Security Agreement (the “Fourth Loan Agreement”) with certain financial institutions named therein as lenders and Bank of America, N.A., as agent for the lenders, which amends and restates the Third Amended and Restated Loan and Security Agreement, dated as of August 31, 2017 (the “Third Loan Agreement”). Among other things, the Fourth Loan Agreement provides for revolving commitments of $300 million and extends the maturity date to June 25, 2026. The Fourth Loan Agreement also amends certain terms of the Third Loan Agreement, including, without limitation, permitting the incurrence of the loans under the Term Loan Agreement (as defined below).
The obligations under the Fourth Loan Agreement are secured by first priority security interests in accounts receivable, inventory and certain other personal property of the Company and its subsidiaries (the “ABL Priority Collateral”) and second priority liens on and security interests in certain real property of the Company’s subsidiaries and certain personal property of the Company and its subsidiary guarantors that is not ABL Priority Collateral (the “Term Loan Priority Collateral”).
The foregoing description of the Fourth Loan Agreement is not intended to be complete and is subject to, and qualified in its entirety by, the Fourth Loan Agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
Credit and Guaranty Agreement
On June 25, 2021, the Company, as borrower, entered into a secured term loan agreement (the “Term Loan Agreement”) with certain subsidiaries, as guarantors, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, the lenders (the “Lenders”) and other parties named therein. The Term Loan Agreement provides for $300 million in aggregate principal amount of term loans (the “Term Loans”). The Term Loans will mature June 25, 2028. Proceeds of the Term Loans will be used for general corporate purposes, including to repay outstanding borrowings under the Fourth Loan Agreement and to redeem the Company’s 6.375% Senior Notes due 2024 (the “2024 Notes”) pursuant to the Redemption (as defined below).
The Term Loans bear interest at the Company’s option of either: (1) the London Interbank Offered Rate (“LIBOR”) (subject to a floor of 0.50%) plus a margin of 2.75% or (2) a base rate (which is equal to the greatest of the prime rate, the Federal Reserve Bank of New York effective rate plus 0.50% and LIBOR plus 1.00%, and is subject to a floor of 1.50%) plus a margin of 1.75%. Additionally, the Term Loans were issued at a price of 99.75%. The Term Loans are secured by a first priority lien on and security interest in the Term Loan Priority Collateral and a second priority security interest in the ABL Priority Collateral. The Term Loan Agreement contains customary representations, warranties, covenants and events of default, but does not contain any financial maintenance covenants.
Certain of the Lenders and their affiliates have provided from time to time, and may continue to provide, investment banking, commercial banking, financial and other services to us, for which we have paid, and intend to pay, customary fees.