ADVANSIX INC. (NYSE:ASIX) Files An 8-K Entry into a Material Definitive AgreementITEM 1.01Entry into a Material Definitive Agreement.
Amendment No. 1 to Credit Agreement
On February 21, 2018 (the “Closing Date”), AdvanSix Inc. (the "Company") entered into Amendment No. 1 (the “Amendment”) to the Credit Agreement, dated as of September 30, 2016, (the “Existing Credit Agreement”), among the Company, the guarantors, the lenders party thereto and Bank of America, N.A., as administrative agent (the Existing Credit Agreement, after giving effect to the Amendment, the “Amended and Restated Credit Agreement”).
The credit facilities under the Existing Credit Agreement consisted of a senior secured term loan in an aggregate principal amount of $270 million and a senior secured revolving credit facility in a principal amount of $155 million. to the Amendment, (i) the term loan facility under the Existing Credit Agreement was terminated and all outstanding term loans thereunder were paid in full and (ii) the maximum aggregate principal amount of the senior secured revolving credit facility (the “Revolving Credit Facility”) was increased to $425 million.
On the Closing Date, the Company borrowed $242 million in loans under the Revolving Credit Facility. The proceeds of such loans were used to repay the outstanding term loan facility under the Existing Credit Agreement. The Revolving Credit Facility under the Amended and Restated Credit Agreement has a scheduled maturity date of February 21, 2023.
The Amended and Restated Credit Agreement permits the Company to utilize up to $40 million of the Revolving Credit Facility for the issuance of letters of credit and up to $40 million for swing line loans. The Company has the option to incur incremental term loans and/or increase the amount of the Revolving Credit Facility in an aggregate principal amount for all such incremental term loans and increases of the Revolving Credit Facility of up to the sum of (x) $175 million plus (y) an amount such that the Company’s Consolidated Senior Secured Leverage Ratio (as defined in the Amended and Restated Credit Agreement) would not be greater than 1.75 to 1.00, in each case, to the extent that any one or more lenders, whether or not currently party to the Amended and Restated Credit Agreement, commits to be a lender for such amount.
Borrowings under the Amended and Restated Credit Agreement bear interest at a rate equal to either the sum of a base rate plus a margin ranging from 0.50% to 1.50% or the sum of a Eurodollar rate plus a margin ranging from 1.50% to 2.50%, with either such margin varying according to the Company’s Consolidated Leverage Ratio (as defined in the Amended and Restated Credit Agreement). The Company is also required to pay a commitment fee in respect of unused commitments under the Revolving Credit Facility, if any, at a rate ranging from 0.20% to 0.40% per annum depending on the Company’s Consolidated Leverage Ratio. The initial margin under the Amended and Restated Credit Agreement is 0.75% for base rate loans and 1.75% for Eurodollar rate loans and the initial commitment fee rate is 0.25% per annum.
Substantially all domestic tangible and intangible assets of the Company and its subsidiaries are pledged as collateral to secure the obligations under the Amended and Restated Credit Agreement.
The Amended and Restated Credit Agreement contains customary covenants limiting the ability of the Company and its subsidiaries to, among other things, pay cash dividends, incur debt or liens, redeem or repurchase stock of the Company, enter into transactions with affiliates, make investments, make capital expenditures, merge or consolidate with others or dispose of assets. The Amended and Restated Credit Agreement also contains financial covenants that require the Company to maintain a Consolidated Interest Coverage Ratio (as defined in the Amended and Restated Credit Agreement) of not less than 3:00 to 1:00 and to maintain a Consolidated Leverage Ratio of (i) 3:50 to 1:00 or less for the fiscal quarter ending March 31, 2018, through and including the fiscal quarter ending December 31, 2019, (ii) 3.25 to 1:00 or less for the fiscal quarter ending March 31, 2020, through and including the fiscal quarter ending December 31, 2020, (iii) 3:00 to 1:00 or less for the fiscal quarter ending March 31, 2021, through and including the fiscal quarter ending December 31, 2021, and (iv) 2.75 to 1:00 or less for the fiscal quarter ending March 31, 2022 and each fiscal quarter thereafter (subject to the Company’s option to elect a consolidated leverage ratio increase in connection with certain acquisitions). If the Company does not comply with the covenants in the Amended and Restated Credit Agreement, the lenders may, subject to customary cure rights, require the immediate payment of all amounts outstanding under the Revolving Credit Facility.
The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Amendment, which is filed as Exhibit 10.1 to this Current Report on Form 8-K, and the Amended and Restated Credit Agreement, which is included as Annex I to the Amendment, each of which is incorporated by reference herein.
ITEM 2.02Results of Operations and Financial Condition.
On February 23,2018, the Company issued a press release announcing its financial results for the quarter and full year ended December 31, 2017. A copy of the press release is furnished herewith as Exhibit 99.1.
The information furnished to this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act.
ITEM 2.03Creation 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 Current Report on Form 8-K is incorporated herein by reference.
ITEM 9.01 Financial Statements and Exhibits.
(d) Exhibits
AdvanSix Inc. ExhibitEX-10.1 2 q42017exhibit101creditagre.htm EXHIBIT 10.1 CREDIT AGREEMENT Exhibit Exhibit 10.1EXECUTION VERSIONAMENDMENT NO. 1 TO CREDIT AGREEMENTThis AMENDMENT NO. 1 TO CREDIT AGREEMENT (this “Amendment”),…To view the full exhibit click here
About ADVANSIX INC. (NYSE:ASIX)
AdvanSix Inc. is an integrated manufacturer of Nylon 6. The Company also sells a variety of other products, all of which are produced as part of the Nylon 6 resin manufacturing process primarily, including caprolactam, ammonium sulfate fertilizers and other chemical intermediates. The Company operates primarily through its integrated manufacturing sites located in Frankford, Pennsylvania, Hopewell, Virginia, and Chesterfield, Virginia. The Company offers ammonium sulfate, which is used by customers as a nitrogen-based fertilizer. It produces ammonium sulfate fertilizer as part of its manufacturing process. The Company manufactures ammonium sulfate fertilizers including Sulf-N and Sulf-N 26. The Company provides AdvanSix Aegis nylon resins and Aegis barrier nylon resins. Its nylon resins are a preferred choice in food, liquid, and consumer packaging along with mono/multifilament products, carpet fibers, automotive compounding and more. It offers Capran biaxially oriented nylon films.