Item 1.01 Entry into a Material Definitive Agreement.
Amendment No. 3 to First Lien Credit Agreement
On May 28, 2021, Hayward Industries, Inc., a New Jersey corporation (the “Borrower”) and a wholly-owned subsidiary of Hayward Holdings, Inc. (the “Company”), and certain wholly-owned subsidiaries of the Borrower party thereto, each, entered into an amendment no. 3 to first lien credit agreement, dated as of May 28, 2021 (the “Third Amendment”), with Bank of America, N.A., as administrative agent and collateral agent, and the other financial institutions and lenders party thereto, which amended the credit agreement, originally dated as of August 4, 2017, by and among the Borrower, Hayward Intermediate, Inc., a Delaware corporation (“Holdings”), certain wholly-owned subsidiaries of the Borrower party thereto from time to time, Bank of America, N.A., as administrative agent and collateral agent, and the other financial institutions party thereto from time to time (as amended prior to May 28, 2021, the “Credit Agreement”). The Third Amendment provides for, among other things, a new tranche of term loans under the Credit Agreement in an aggregate original principal amount of approximately $1,000,000,000 (the “New Term Loans”), which New Term Loans replace or refinance in full all of the existing term loans outstanding under the Credit Agreement as in effect immediately prior to the Third Amendment. The New Term Loans mature on May 28, 2028. The New Term Loans bear interest at a rate per annum equal to an applicable interest rate margin, plus, at the Borrower’s option, either (x) the London interbank offered rate (“LIBOR”) (LIBOR with respect to the New Term Loans shall be subject to a floor of 0.50%) or (y) an alternate base rate (which will be the highest of (i) 0.50% per annum above the federal funds effective rate, (ii) one-month LIBOR plus 1.00% per annum and (iii) the prime rate (the alternate base rate with respect to the New Term Loans shall be subject to a floor of 0.50%)). The New Term Loans are subject to quarterly amortization equal to 0.25% of the aggregate original principal amount. Voluntary prepayments of the New Term Loans are permitted, in whole or in part, with prior notice, without premium or penalty (except LIBOR breakage costs and a call premium in the case of certain repricing events within a specified period of time after May 28, 2021, as further set forth in the Third Amendment).
The foregoing summary of the Third Amendment is subject to, and qualified in its entirety by, the full text of the Third Amendment, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
Amendment No. 2 to ABL Credit Agreement
On June 1, 2021, Holdings, the Borrower, as the “US Borrower”, Hayward Pool Products Canada, Inc. / Produits De Piscines Hayward Canada, Inc., a Canadian federal corporation (the “Canadian Borrower”), Hayward Ibérica, S.L.U., a Spanish private limited liability corporation (Sociedad Limitada Unipersonal) (the “Spanish Borrower”) and certain wholly-owned subsidiaries of the US Borrower party thereto, each a wholly-owned indirect subsidiary of the Company, entered into an amendment no. 2 to ABL credit agreement, dated as of June 1, 2021 (the “Second Amendment”), with Bank of America, N.A., as administrative agent and collateral agent, and the other financial institutions and lenders party thereto, which amended the ABL credit agreement, originally dated as of August 4, 2017, by and among the Borrower, the Canadian Borrower, Holdings, certain wholly-owned subsidiaries of the Borrower party thereto from time to time, Bank of America, N.A., as administrative agent and collateral agent, and the other financial institutions party thereto from time to time (as amended prior to June 1, 2021, the “ABL Credit Agreement”). The Second Amendment provides for, among other things, a new tranche of revolving loans under the ABL Credit Agreement in an aggregate original principal amount of approximately $475,000,000 (the “New Revolving Loan Commitments”), which New Revolving Loan Commitments replace or refinance in full all of the existing commitments outstanding under the ABL Credit Agreement (as in effect immediately prior to the Second Amendment), all as further set forth in the Second Amendment. The New Revolving Loan Commitments mature on June 1, 2026. The foregoing summary of the Second Amendment is subject to, and qualified in its entirety by, the full text of the Second Amendment, which is attached hereto as Exhibit 10.2 and incorporated herein by reference.