AMERICAN AXLE & MANUFACTURING HOLDINGS, INC. (NYSE:AXL) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement
Credit Agreement, Collateral Agreement and Guarantee Agreement
In connection with the acquisition (the Acquisition) by American
Axle Manufacturing Holdings, Inc. (Holdings) of Metaldyne
Performance Group Inc. (MPG), on April 6, 2017 American Axle
Manufacturing, Inc. (AAM) and Holdings entered into a credit
agreement (the Credit Agreement), among AAM, as borrower,
Holdings, each financial institution party thereto as a lender
(the Lenders), and JPMorgan Chase Bank, N.A., as administrative
agent, to which Holdings and certain of its restricted
subsidiaries (including certain subsidiaries of MPG acquired as
part of the Acquisition) are required to guarantee the borrowings
of AAM thereunder and Holdings, AAM and certain of their
restricted subsidiaries are required to pledge their assets
(including, without limitation, after-acquired assets), subject
to certain exceptions and limitations. In connection with the
Credit Agreement, Holdings, AAM and certain of their restricted
subsidiaries entered into a Collateral Agreement with JPMorgan
Chase Bank, N.A., as collateral agent, and a Guarantee Agreement
with JPMorgan Chase Bank, N.A., as administrative agent.
Axle Manufacturing Holdings, Inc. (Holdings) of Metaldyne
Performance Group Inc. (MPG), on April 6, 2017 American Axle
Manufacturing, Inc. (AAM) and Holdings entered into a credit
agreement (the Credit Agreement), among AAM, as borrower,
Holdings, each financial institution party thereto as a lender
(the Lenders), and JPMorgan Chase Bank, N.A., as administrative
agent, to which Holdings and certain of its restricted
subsidiaries (including certain subsidiaries of MPG acquired as
part of the Acquisition) are required to guarantee the borrowings
of AAM thereunder and Holdings, AAM and certain of their
restricted subsidiaries are required to pledge their assets
(including, without limitation, after-acquired assets), subject
to certain exceptions and limitations. In connection with the
Credit Agreement, Holdings, AAM and certain of their restricted
subsidiaries entered into a Collateral Agreement with JPMorgan
Chase Bank, N.A., as collateral agent, and a Guarantee Agreement
with JPMorgan Chase Bank, N.A., as administrative agent.
to the Credit Agreement, the Lenders agreed to provide a $100
million term loan A facility (the Term Loan A Facility), a $1.55
billion term loan B facility (the Term Loan B Facility) and a
$900 million multi-currency revolving credit facility (the
Revolving Credit Facility, and together with the Term Loan A
Facility and the Term Loan B Facility, the Credit Facilities).
The proceeds of the Term Loan A Facility and the Term Loan B
Facility were used to finance a portion of the consideration for
the Acquisition, pay transaction costs, redeem in full MPG Holdco
I Inc.s 7.375% Senior Notes due 2022, and repay the existing
indebtedness of AAM under its Amended and Restated Credit
Agreement, dated as of January 9, 2004, amended and restated as
of September 13, 2013 and as further amended, among AAM, as
borrower, Holdings, JPMorgan Chase Bank, N.A. as Administrative
Agent, and each financial institution party thereto as a lender,
as well as existing indebtedness of MPG under its Credit
Agreement, dated as of October 20, 2014 and as amended as of May
8, 2015, among MPG Holdco I Inc., as guarantor, MPG, the
subsidiary guarantors party thereto, each financial institution
party thereto as a lender, and Goldman Sachs Bank USA, as
administrative agent. The proceeds of the Revolving Credit
Facility will be used for general corporate purposes.
million term loan A facility (the Term Loan A Facility), a $1.55
billion term loan B facility (the Term Loan B Facility) and a
$900 million multi-currency revolving credit facility (the
Revolving Credit Facility, and together with the Term Loan A
Facility and the Term Loan B Facility, the Credit Facilities).
The proceeds of the Term Loan A Facility and the Term Loan B
Facility were used to finance a portion of the consideration for
the Acquisition, pay transaction costs, redeem in full MPG Holdco
I Inc.s 7.375% Senior Notes due 2022, and repay the existing
indebtedness of AAM under its Amended and Restated Credit
Agreement, dated as of January 9, 2004, amended and restated as
of September 13, 2013 and as further amended, among AAM, as
borrower, Holdings, JPMorgan Chase Bank, N.A. as Administrative
Agent, and each financial institution party thereto as a lender,
as well as existing indebtedness of MPG under its Credit
Agreement, dated as of October 20, 2014 and as amended as of May
8, 2015, among MPG Holdco I Inc., as guarantor, MPG, the
subsidiary guarantors party thereto, each financial institution
party thereto as a lender, and Goldman Sachs Bank USA, as
administrative agent. The proceeds of the Revolving Credit
Facility will be used for general corporate purposes.
The Term Loan A Facility and the Revolving Credit Facility will
mature on April 6, 2022, and the Term Loan B Facility will mature
on April 6, 2024. Each maturity date may be extended by written
request from AAM to the Administrative Agent, to which the
applicable lender may agree in its sole discretion. Borrowings
under the Credit Facilities bear interest at rates based on the
applicable Eurodollar rate or alternate base rate, as AAM may
elect, in each case plus an applicable margin determined based on
AAMs total net leverage ratio. The alternate base rate is the
greatest of (a) the JPMorgan Chase Bank, N.A. prime rate, (b) the
Federal Reserve Bank of New York rate plus 0.50% and (c) the
adjusted Eurodollar rate plus 1.00%. The applicable margin for
Eurodollar-based loans under the Credit Facilities will be
between 1.25% and 2.25% with respect to any loan under the Term
Loan A Facility, 2.25% with respect to any loan under the Term
Loan B Facility, and between 2.00% and 3.00% with respect to any
loan under the Revolving Credit Facility. The applicable margin
for loans subject to alternate base rate will be between 0.25%
and 1.25% with respect to any loan under the Term Loan A
Facility, 1.25% with respect to any loan under the Term Loan B
Facility, and between 1.00% and 2.00% with respect to any loan
under the Revolving Credit Facility.
mature on April 6, 2022, and the Term Loan B Facility will mature
on April 6, 2024. Each maturity date may be extended by written
request from AAM to the Administrative Agent, to which the
applicable lender may agree in its sole discretion. Borrowings
under the Credit Facilities bear interest at rates based on the
applicable Eurodollar rate or alternate base rate, as AAM may
elect, in each case plus an applicable margin determined based on
AAMs total net leverage ratio. The alternate base rate is the
greatest of (a) the JPMorgan Chase Bank, N.A. prime rate, (b) the
Federal Reserve Bank of New York rate plus 0.50% and (c) the
adjusted Eurodollar rate plus 1.00%. The applicable margin for
Eurodollar-based loans under the Credit Facilities will be
between 1.25% and 2.25% with respect to any loan under the Term
Loan A Facility, 2.25% with respect to any loan under the Term
Loan B Facility, and between 2.00% and 3.00% with respect to any
loan under the Revolving Credit Facility. The applicable margin
for loans subject to alternate base rate will be between 0.25%
and 1.25% with respect to any loan under the Term Loan A
Facility, 1.25% with respect to any loan under the Term Loan B
Facility, and between 1.00% and 2.00% with respect to any loan
under the Revolving Credit Facility.
The Credit Agreement requires certain mandatory prepayments
of outstanding loans under the Term Loan A Facility and the
Term Loan B Facility, subject to certain exceptions, based
on 50% of the annual excess cash flow of Holdings and its
restricted subsidiaries (with step-downs to 0% based upon
the total net leverage ratio, and with no prepayment
required if annual excess cash flow is under a specified
minimum threshold), the net cash proceeds of certain asset
sales and casualty and condemnation events, subject to
reinvestment rights and certain other exceptions, and the
net cash proceeds of any issuance of debt not otherwise
permitted under the Credit Agreement.
of outstanding loans under the Term Loan A Facility and the
Term Loan B Facility, subject to certain exceptions, based
on 50% of the annual excess cash flow of Holdings and its
restricted subsidiaries (with step-downs to 0% based upon
the total net leverage ratio, and with no prepayment
required if annual excess cash flow is under a specified
minimum threshold), the net cash proceeds of certain asset
sales and casualty and condemnation events, subject to
reinvestment rights and certain other exceptions, and the
net cash proceeds of any issuance of debt not otherwise
permitted under the Credit Agreement.
The Credit Agreement permits AAM to incur incremental term
loan borrowings and/or increase commitments under the
Revolving Credit Facility, subject to certain limitations
and the satisfaction of certain conditions, in an aggregate
amount not to exceed (i) $600 million, plus (ii) certain
voluntary prepayments, plus (iii) additional amounts
subject to pro forma compliance with a first lien net
leverage ratio for Holdings and its restricted
subsidiaries.
loan borrowings and/or increase commitments under the
Revolving Credit Facility, subject to certain limitations
and the satisfaction of certain conditions, in an aggregate
amount not to exceed (i) $600 million, plus (ii) certain
voluntary prepayments, plus (iii) additional amounts
subject to pro forma compliance with a first lien net
leverage ratio for Holdings and its restricted
subsidiaries.
The Credit Agreement contains customary affirmative and
negative covenants, including, among others, financial
covenants based on total net leverage and cash interest
expense coverage ratios and limitations on the ability of
Holdings, AAM or their restricted subsidiaries to make
certain investments, declare or pay dividends or
distributions on capital stock, redeem or repurchase
capital stock and certain debt obligations, incur liens,
incur indebtedness, or merge, make certain acquisitions or
certain sales of assets. The Credit Agreement includes
customary events of default, the occurrence of which would
permit the lenders to, among other things, declare the
principal, accrued interest and other obligations to be
immediately due and payable. Upon such default, the lenders
may also seek customary remedies with respect to the
collateral under the Collateral Agreement.
negative covenants, including, among others, financial
covenants based on total net leverage and cash interest
expense coverage ratios and limitations on the ability of
Holdings, AAM or their restricted subsidiaries to make
certain investments, declare or pay dividends or
distributions on capital stock, redeem or repurchase
capital stock and certain debt obligations, incur liens,
incur indebtedness, or merge, make certain acquisitions or
certain sales of assets. The Credit Agreement includes
customary events of default, the occurrence of which would
permit the lenders to, among other things, declare the
principal, accrued interest and other obligations to be
immediately due and payable. Upon such default, the lenders
may also seek customary remedies with respect to the
collateral under the Collateral Agreement.
The foregoing description of the Credit Agreement, the
Collateral Agreement and the Guarantee Agreement do not
purport to be complete and are qualified in their entirety
by reference to the full text of the Credit Agreement,
Collateral Agreement and Guarantee Agreement. Copies
thereof are included in Exhibits 10.1, 10.2 and 99.1,
respectively, hereto and are incorporated by reference
herein.
Collateral Agreement and the Guarantee Agreement do not
purport to be complete and are qualified in their entirety
by reference to the full text of the Credit Agreement,
Collateral Agreement and Guarantee Agreement. Copies
thereof are included in Exhibits 10.1, 10.2 and 99.1,
respectively, hereto and are incorporated by reference
herein.
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Item 2.03.
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Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information in Item 1.01 of this Current Report is
incorporated by reference into this Item 2.03.
incorporated by reference into this Item 2.03.
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Item 9.01
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Financial Statements and Exhibits
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(d)
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Exhibits
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10.1
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Credit Agreement dated as of April 6, 2017 among American
Axle Manufacturing Holdings, Inc., American Axle Manufacturing, Inc., each financial institution party thereto as a lender and JPMorgan Chase Bank, N.A., as Administrative Agent. |
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10.2
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Collateral Agreement dated as of April 6, 2017 among
American Axle Manufacturing Holdings, Inc., American Axle Manufacturing, Inc., certain subsidiaries of American Axle Manufacturing Holdings, Inc. identified therein and JPMorgan Chase Bank, N.A., as Collateral Agent. |
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99.1
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GuaranteeAgreement dated as of April 6, 2017 among
American Axle Manufacturing Holdings, Inc., American Axle Manufacturing, Inc., certain subsidiaries identified therein and JPMorgan Chase Bank, N.A., as Administrative Agent. |
About AMERICAN AXLE & MANUFACTURING HOLDINGS, INC. (NYSE:AXL)
American Axle & Manufacturing Holdings, Inc. (AAM) manufactures, engineers, designs and validates driveline and drivetrain systems and related components and chassis modules for light trucks, sport utility vehicles, crossover vehicles, passenger cars and commercial vehicles. Its driveline and drivetrain systems include components that transfer power from the transmission and deliver it to the drive wheels. Its driveline, drivetrain and related products include axles, driveheads, chassis modules, driveshafts, power transfer units, transfer cases, chassis and steering components, transmission parts, electric drive systems and metal-formed products. The Company’s subsidiary, e-AAM Driveline Systems AB (e-AAM), engineers and develops battery electric and hybrid driveline systems to be commercialized for crossover vehicles and passenger cars. As of April 6, 2017, it operated in 17 countries and had approximately 90 manufacturing, engineering and business office facilities around the world. AMERICAN AXLE & MANUFACTURING HOLDINGS, INC. (NYSE:AXL) Recent Trading Information
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC. (NYSE:AXL) closed its last trading session down -0.08 at 16.70 with 1,575,993 shares trading hands.
