| Item 1.01 |
Entry into a Material Definitive Agreement.
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Amendment No. 12 to Third
Amended and Restated Credit Agreement
On August 29, 2022 (the “Closing Date”), Harsco Corporation (the
“Company”) entered into Amendment No. 12 to Third Amended and
Restated Credit Agreement (“Amendment No. 12”) which amends
the Company’s Third Amended and Restated Credit Agreement, dated as
of November 2, 2016 (as the same has been amended,
supplemented or otherwise modified prior to the Closing Date, and
as further amended by Amendment No. 12, the “Senior Secured
Credit Facility”), by and among the Company, Bank of America, N.A.,
as administrative agent and as collateral agent, the lenders party
thereto, and the other parties thereto.
Amendment No. 12 amended the Company’s existing
$700 million revolving credit facility under the Senior
Secured Credit Facility (the “Revolving Credit Facility”; and the
loans thereunder, the “Revolving Credit Loans”) to, among other
things, increase certain levels set forth in the total net leverage
ratio covenant, temporarily reduce the ratio under the interest
coverage covenant and add a new pricing level applicable to the
Revolving Credit Loans. After giving effect to Amendment
No. 12, the Revolving Credit Loans bear interest at a rate,
depending on total net leverage, ranging from 50 to 175 basis
points over base rate or 150 to 275 basis points over LIBOR,
subject to a zero floor. Under the Revolving Credit Facility, the
Company’s total net leverage is capped at 5.50x of consolidated
adjusted EBITDA through the end of 2023; the maximum total net
leverage ratio decreases quarterly thereafter, reaching 4.0x for
the last quarter in 2024 and thereafter. The total net leverage
ratio covenant applicable to the third quarter of 2024 and earlier
is subject to a 0.50x decrease upon a sale of the Company’s Rail
business (if completed). Pursuant to Amendment No. 12, the
Company’s required coverage of consolidated interest charges is set
at a minimum of 2.75x of consolidated adjusted EBITDA through the
end of 2024 (subject to an increase to 3.0x upon a sale of the
Company’s Rail business (if completed)), and leveling at 3.0x for
the first quarter in 2025 and thereafter.
In addition, Amendment No. 12 extends the current relief
period applicable to certain covenants to the date on which
financial statements are delivered for the fiscal quarter ending
December 31, 2024 (extended from December 31, 2023), or
earlier upon the Company delivering a certificate demonstrating a
total net leverage ratio not exceeding 4.0x and a ratio of
consolidated EBITDA to consolidated interest charges of not less
than 3.0x. For the duration of such relief period, certain of the
exceptions to negative covenants are suspended while the
step-up to the maximum
total net leverage covenant ratio otherwise applicable in
connection with a significant acquisition is also suspended.
The foregoing description of Amendment No. 12 is qualified in
its entirety by reference to the full and complete terms of
Amendment No. 12, which is attached as Exhibit 10.1 hereto and
is incorporated by reference herein.
Certain of the agents and lenders providing funding or other
services under the Senior Secured Credit Facility, as well as
certain of their affiliates, have, from time to time, provided
various financial advisory, commercial and investment banking
services to the Company and/or its affiliates for which they have
received customary fees and commissions.
Immaterial Amendment to Senior
Secured Credit Facility
On August 19, 2022, the Company entered into an immaterial
amendment (“Amendment No. 11”) to the Senior Secured Credit
Facility, which modifies the definition of “Consolidated Current
Assets” in order to correct an error of a technical nature relevant
to the calculation of excess cash flow. The foregoing description
of Amendment No. 11 is qualified in its entirety by reference
to the full and complete terms of Amendment No. 11, which is
attached as Exhibit 10.2 hereto and is incorporated by reference
herein.