ACTUANT CORPORATION (NYSE:ATU) Files An 8-K Entry into a Material Definitive Agreement
Entry into a Material Definitive Agreement.
On March 29, 2019, Actuant Corporation (the “Company”) entered into a Credit Agreement (the “Credit Agreement”) by and among the Company, the foreign subsidiary borrowers party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Wells Fargo Bank, National Association, Bank of America, N.A., SunTrust Bank, and PNC Bank, National Association, as Co-Syndication Agents and BMO Harris Bank, N.A., as Documentation Agent.
The Credit Agreement provides for a $400 million revolving credit facility, with a sublimit of $200 million for borrowings denominated in euros, Pounds Sterling or other mutually acceptable foreign currencies, and a $200 million term loan. The Credit Agreement also provides for a $300 million expansion option, which may be increased by up to an additional $200 million to the extent of any repayment of the term loan, which may be exercised by the Company subject to certain conditions. Borrowings under both the revolving credit facility and the term loan will mature on March 29, 2024. Borrowings under the Credit Agreement are secured by substantially all personal property assets of the Company and its domestic subsidiary guarantors (other than certain specified excluded assets) and certain equity interests owned by the foreign law pledgors. The $200 million term loan is required to be repaid in principal installments of $1.25 million per quarter beginning on August 31, 2019, increasing to $2.5 million per quarter beginning on May 31, 2020, increasing to $3.75 million per quarter beginning on May 31, 2021, and increasing to $5.0 million per quarter beginning on May 31, 2022, with the remaining balance due at maturity.
Borrowings under the Credit Agreement initially bear interest at LIBOR plus 1.625%. The interest rate spreads above LIBOR or the base rate are subject to adjustments based on the Company’s net leverage ratio, ranging from 1.125% to 2.00% in the case of loans bearing interest at LIBOR and from 0.125% to 1.00% in the case of loans bearing interest at the base rate. In addition, a non-use fee is payable quarterly on the average unused revolving credit facility ranging from 0.15% to 0.30% per annum, based on the Company’s net leverage ratio.
The Credit Agreement contains customary limits and restrictions concerning investments, sales of assets, liens on assets, dividends and other payments but permits the sale of the Engineered Components Systems business without lender consent subject to certain conditions. The two financial covenants included are a maximum net leverage ratio of 3.75:1.00 and a minimum interest coverage ratio of 3.50:1.00, in each case subject to adjustment in connection with certain transactions, including reduction of the minimum interest coverage ratio to 3.00:1.00 for any fiscal quarter ending within 12 months after the sale of the Engineered Components Systems business.
The Credit Agreement contains events of default including, but not limited to, the following: failure to pay outstanding principal or interest when due, failure of applicable representations or warranties to be correct in any material respects, failure to perform any other term, covenant or agreement and such failure is not remedied after notice of such failure within the applicable grace period with respect thereto, if any, a cross-default with other debt in certain circumstances, certain defaults upon obligations under the Employee Retirement Income Security Act, bankruptcy and other insolvency events, material judgments, and certain changes of control of the Company. If an event of default occurs and is continuing, the lenders may, among other things, terminate their obligations thereunder and require the Company to repay all amounts under the Credit Agreement.
The Credit Agreement is filed as Exhibit 10.1 to this Form 8-K and is incorporated herein by reference. The foregoing description of the Credit Agreement is qualified in its entirety to the terms of the Credit Agreement.
Item 1.02Termination of Material Definitive Agreement.
In connection with its entry into the Credit Agreement, on March 29, 2019, the Company terminated and repaid all indebtedness outstanding under the Fifth Amended and Restated Credit Agreement, dated as of May 8, 2015, as amended (the “Prior Credit Agreement”), by and among the Company, the foreign subsidiary borrowers party thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A., as agent. The Prior Credit Agreement provided for a $300 million revolving credit facility and a $300 million term loan facility. Borrowings under the Prior Credit Facility were scheduled to fully mature on May 8, 2020.
|Item 2.03|| |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 of this Form 8-K is hereby incorporated by reference into this Item 2.03.
Item 9.01Financial Statements and Exhibits.
Press Release dated April 1, 2019
Credit Agreement dated as of March 29, 2019 by and among Actuant Corporation, the foreign subsidiary borrowers party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Wells Fargo Bank, National Association, Bank of America, N.A., SunTrust Bank, and PNC Bank, National Association, as Co-Syndication Agents and BMO Harris Bank, N.A., as Documentation Agent.
ACTUANT CORP Exhibit
EX-99.1 2 a51962981ex99_1.htm EXHIBIT 99.1 Exhibit 99.1 Actuant Announces Completion of Debt Refinancing MILWAUKEE–(BUSINESS WIRE)–April 2,…
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About ACTUANT CORPORATION (NYSE:ATU)
Actuant Corporation designs, manufactures and distributes a range of industrial products and systems to various end markets. The Company operates through three segments: Industrial, Energy and Engineered Solutions. The Company’s Industrial segment is primarily involved in the design, manufacture and distribution of branded hydraulic and mechanical tools to the maintenance, industrial, infrastructure and production automation markets. The Company’s Energy segment provides joint integrity products and services, customized offshore vessel mooring solutions, as well as rope and cable solutions to the global oil and gas, power generation and other energy markets. The Company’s Engineered Solutions segment provides engineered position and motion control systems to original equipment manufacturers (OEM) in various on and off-highway vehicle markets, as well as various other products to the industrial and agricultural markets.