Carriage Services, Inc. (NYSE:CSV) Files An 8-K Entry into a Material Definitive Agreement
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

Additional Notes

On December 19, 2019, Carriage Services, Inc. (the “Company”) issued an additional $75 million in aggregate principal amount of 6.625% Senior Notes due 2026 (the “New Notes”) and related guarantees by the Subsidiary Guarantors (as defined below) (the “Guarantees” and, together with the New Notes, the “Securities”) in a private offering (the “Private Offering”) under Rule 144A and Regulation S of the Securities Act of 1933, as amended (the “Securities Act”). The Securities were issued as additional securities under the indenture, dated May 31, 2018 (the “Indenture”), by and among the Company, the guarantors named therein (the “Subsidiary Guarantors”) and Wilmington Trust, National Association, as trustee, to which the Company issued $325 million in aggregate principal amount of its 6.625% Senior Notes due 2026 (the “Existing Notes”) in May 2018.

The issuance of the New Notes resulted in approximately $74.9 million in net proceeds to the Company after deducting the initial purchasers’ discount and offering expenses payable by the Company. The Company intends to use the net proceeds of the offering for general corporate purposes, including repaying revolving debt and for paying for its acquisitions.

The New Notes and the Existing Notes are treated as a single class of securities under the Indenture, and the New Notes have identical terms to the Existing Notes, except with respect to the date of issuance, the issue price, the initial interest accrual date and the initial interest payment date. The terms of the Indenture and the Existing Notes are described in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 31, 2018 (the “May 2018 Form 8-K”).

The New Notes will bear interest at an annual rate of 6.625%. Interest on the New Notes is payable semiannually in arrears on June 1 and December 1 of each year, beginning on June 1, 2020, to holders of record on each May 15 and November 15 preceding an interest payment date. The New Notes mature on June 1, 2026, unless earlier redeemed or purchased. The New Notes are unsecured, senior obligations of the Company. The New Notes are fully and unconditionally guaranteed on a senior unsecured basis, jointly and severally, by each of the Subsidiary Guarantors.

A copy of the Indenture is attached as Exhibit 4.1 to the May 2018 Form 8-K and is hereby incorporated by reference herein. The form of the Notes (included as Exhibit A of the Indenture filed as Exhibit 4.1 to the May 2018 Form 8-K) is filed as Exhibit 4.2 to the May 2018 Form 8-K and is hereby incorporated by reference herein. The descriptions of the material terms of the Indenture and the Securities are qualified in their entirety by reference to such exhibits.

Amended Credit Facility

On December 19, 2019, the Company entered into a third amendment and commitment increase (the “Amended Credit Facility”) to its senior secured revolving credit facility dated May 31, 2018 (as amended, the “Existing Credit Facility”) with the financial institutions party thereto, as lenders, and Bank of America, N.A., as administrative agent (in such capacity, the “Administrative Agent”). After giving effect to the use of proceeds from the Private Offering and the consummation of the recently announced pending acquisitions, the Company expects to have $115.0 million of outstanding borrowings under the Amended Credit Facility and $73.0 million of availability after giving effect to $2.0 million of outstanding letters of credit.

The Amended Credit Facility is comprised of (i) a $190.0 million revolving credit facility, which includes a $15.0 million subfacility for letters of credit and a $10.0 million swingline, and (ii) an accordion or incremental option allowing for future increases in the facility size by an additional amount of up to $75.0 million in the form of increased revolving commitments or incremental term loans. The final maturity of the Amended Credit Facility will occur on May 31, 2023. Interest will accrue on amounts outstanding under the Amended Credit Facility based on the Company’s Total Leverage Ratio (as defined in the Amended Credit Facility) in accordance with the following pricing grid, provided that whenever the Company’s actual Total Leverage Ratio is greater than 5.00 to 1.00, then an additional 0.500% shall be added to the applicable rates in Pricing Level 4: