Commercial Vehicle Group, Inc. (NASDAQ:CVGI) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.
Term Loan Agreement
On April 12, 2017, Commercial Vehicle Group, Inc. (the Company)
entered into a $175 million secured credit facility (the Term
Loan Facility) to a term loan and security agreement (the Term
Loan Agreement) with Bank of America, N.A., as administrative
agent, and other lender parties thereto. Subject to the terms
thereof, the receipt of incremental lender commitments and the
satisfaction of certain other conditions, the Company may
increase the amount outstanding under the Term Loan Facility by
$20 million plus (so long as the pro forma leverage ratio does
not exceed 3.5x) additional incremental term loans. All
obligations of the Company under the Term Loan Agreement are
unconditionally guaranteed by the Company and certain of its
subsidiaries. The Company and each of its guarantor subsidiaries
have granted liens in substantially all of their property to
secure their respective obligations under the Term Loan
Agreement, guarantees and related documents. The Term Loan
Facility matures on April 12, 2023.
entered into a $175 million secured credit facility (the Term
Loan Facility) to a term loan and security agreement (the Term
Loan Agreement) with Bank of America, N.A., as administrative
agent, and other lender parties thereto. Subject to the terms
thereof, the receipt of incremental lender commitments and the
satisfaction of certain other conditions, the Company may
increase the amount outstanding under the Term Loan Facility by
$20 million plus (so long as the pro forma leverage ratio does
not exceed 3.5x) additional incremental term loans. All
obligations of the Company under the Term Loan Agreement are
unconditionally guaranteed by the Company and certain of its
subsidiaries. The Company and each of its guarantor subsidiaries
have granted liens in substantially all of their property to
secure their respective obligations under the Term Loan
Agreement, guarantees and related documents. The Term Loan
Facility matures on April 12, 2023.
The proceeds of the term loans incurred under the Facility will
be used, together with cash on hand of the Company, to (a) fund
the redemption, satisfaction and discharge of all of the Companys
outstanding 7.875% Senior Secured Notes due 2019 (the 2019 Notes)
issued to that certain Indenture, dated as of April 26, 2011 (as
supplemented prior to the date hereof, the 2019 Indenture), among
the Company, as issuer, the subsidiaries of the Company party
thereto as subsidiary guarantors and U.S. Bank National
Association, as trustee (the 2019 Notes Trustee), (b) pay related
transaction costs, fees and expenses incurred in connection
therewith, and (c) for working capital and other lawful corporate
purposes of the Company.
be used, together with cash on hand of the Company, to (a) fund
the redemption, satisfaction and discharge of all of the Companys
outstanding 7.875% Senior Secured Notes due 2019 (the 2019 Notes)
issued to that certain Indenture, dated as of April 26, 2011 (as
supplemented prior to the date hereof, the 2019 Indenture), among
the Company, as issuer, the subsidiaries of the Company party
thereto as subsidiary guarantors and U.S. Bank National
Association, as trustee (the 2019 Notes Trustee), (b) pay related
transaction costs, fees and expenses incurred in connection
therewith, and (c) for working capital and other lawful corporate
purposes of the Company.
Interest Rates and Fees
Amounts outstanding under the Term Loan Agreement accrue interest
at a per annum rate equal to (at the Companys option) the base
rate plus 5.00% or the LIBOR rate plus 6.00%. In connection with
the initial funding of the term loan the Company shall pay to the
term loan lenders an original issue discount equal to 2.0% of the
term loan amount.
at a per annum rate equal to (at the Companys option) the base
rate plus 5.00% or the LIBOR rate plus 6.00%. In connection with
the initial funding of the term loan the Company shall pay to the
term loan lenders an original issue discount equal to 2.0% of the
term loan amount.
Covenants and Other Terms
The Term Loan Agreement contains a maximum total leverage ratio
covenant and other customary restrictive covenants, including,
without limitation, limitations on the ability of the Company and
its subsidiaries to incur additional debt and guarantees; grant
certain liens on assets; pay dividends or make certain other
distributions; make certain investments or acquisitions; dispose
of certain assets; make payments on certain indebtedness; merge,
combine with any other person or liquidate; amend organizational
documents; file consolidated tax returns with entities other than
other borrowers or their subsidiaries; make material changes in
accounting treatment or reporting practices; enter into certain
restrictive agreements; enter into certain hedging agreements;
engage in transactions with affiliates; enter into certain
employee benefit plans; amend subordinated debt; and other
matters customarily included in senior secured loan agreements.
The Term Loan Agreement also contains customary reporting and
other affirmative covenants.
covenant and other customary restrictive covenants, including,
without limitation, limitations on the ability of the Company and
its subsidiaries to incur additional debt and guarantees; grant
certain liens on assets; pay dividends or make certain other
distributions; make certain investments or acquisitions; dispose
of certain assets; make payments on certain indebtedness; merge,
combine with any other person or liquidate; amend organizational
documents; file consolidated tax returns with entities other than
other borrowers or their subsidiaries; make material changes in
accounting treatment or reporting practices; enter into certain
restrictive agreements; enter into certain hedging agreements;
engage in transactions with affiliates; enter into certain
employee benefit plans; amend subordinated debt; and other
matters customarily included in senior secured loan agreements.
The Term Loan Agreement also contains customary reporting and
other affirmative covenants.
The Term Loan Agreement contains customary events of default,
including, without limitation, nonpayment of obligations under
the revolving credit facility when due; material inaccuracy of
representations and warranties; violation of covenants in the
Term Loan Agreement and certain other documents executed in
connection therewith; breach or default of agreements related to
material debt; revocation or attempted revocation of guarantees;
denial of the validity or enforceability of the loan documents or
failure of the loan documents to be in full force and effect;
certain material judgments; certain events of bankruptcy or
insolvency; certain Employee Retirement Income Securities Act
events; and a change in control of the Company. Certain of the
defaults are subject to exceptions, materiality qualifiers, grace
periods and baskets customary for credit facilities of this type.
including, without limitation, nonpayment of obligations under
the revolving credit facility when due; material inaccuracy of
representations and warranties; violation of covenants in the
Term Loan Agreement and certain other documents executed in
connection therewith; breach or default of agreements related to
material debt; revocation or attempted revocation of guarantees;
denial of the validity or enforceability of the loan documents or
failure of the loan documents to be in full force and effect;
certain material judgments; certain events of bankruptcy or
insolvency; certain Employee Retirement Income Securities Act
events; and a change in control of the Company. Certain of the
defaults are subject to exceptions, materiality qualifiers, grace
periods and baskets customary for credit facilities of this type.
The Term Loan Agreement requires the Company to make quarterly
amortization payments at an annualized rate of 2.5% of the
initial term loan amount and other mandatory prepayments (subject
to reinvestment rights) with the proceeds of certain asset
dispositions and upon the receipt of insurance or condemnation
proceeds. In addition, the Company is required to make annual
excess cash flow prepayments.
amortization payments at an annualized rate of 2.5% of the
initial term loan amount and other mandatory prepayments (subject
to reinvestment rights) with the proceeds of certain asset
dispositions and upon the receipt of insurance or condemnation
proceeds. In addition, the Company is required to make annual
excess cash flow prepayments.
Voluntary prepayment of amounts outstanding under the Term Loan
Facility are permitted at any time, subject to a 1.00% pricing
based soft-call premium (applicable to voluntary prepayments
during the 12 months immediately following the initial funding of
the Term Loan Facility) and the payment of customary LIBOR
breakage costs, if applicable.
Facility are permitted at any time, subject to a 1.00% pricing
based soft-call premium (applicable to voluntary prepayments
during the 12 months immediately following the initial funding of
the Term Loan Facility) and the payment of customary LIBOR
breakage costs, if applicable.
A copy of the Term Loan Agreement is attached hereto as Exhibit
10.01 and is incorporated herein by reference. The foregoing
description is qualified in its entirety by reference to the Term
Loan Agreement.
10.01 and is incorporated herein by reference. The foregoing
description is qualified in its entirety by reference to the Term
Loan Agreement.
Third Amended and Restated Loan and Security Agreement
On April 12, 2017, the Company and certain of its subsidiaries,
as co-borrowers entered into a Third Amended and Restated Loan
and Security Agreement (the Revolving Loan Agreement) with Bank
of America, N.A. as agent, and certain financial institutions as
lenders, which agreement governs the Companys revolving credit
facility (the Revolving Credit Facility). The Company and each of
its co-borrower subsidiaries are jointly and severally liable for
all obligations arising under the Revolving Credit Facility and
have granted liens in substantially all of their property (other
than in respect of real estate) to secure their respective
obligations under the Revolving Loan Agreement and related
documents. The Revolving Credit Facility matures on April 12,
2022.
as co-borrowers entered into a Third Amended and Restated Loan
and Security Agreement (the Revolving Loan Agreement) with Bank
of America, N.A. as agent, and certain financial institutions as
lenders, which agreement governs the Companys revolving credit
facility (the Revolving Credit Facility). The Company and each of
its co-borrower subsidiaries are jointly and severally liable for
all obligations arising under the Revolving Credit Facility and
have granted liens in substantially all of their property (other
than in respect of real estate) to secure their respective
obligations under the Revolving Loan Agreement and related
documents. The Revolving Credit Facility matures on April 12,
2022.
In accordance with the terms of the Revolving Credit Facility the
Company and the other named borrowers thereunder are entitled
(subject to the terms and conditions described therein) to
request loans and other financial accommodations in an amount
equal to the lesser of $65.0 million and a borrowing base
composed of accounts receivable and inventory. The Company can
increase the size of the revolving commitments thereunder by an
incremental $40.0 million, subject to the consent of the lenders
providing the incremental commitments. Up to an aggregate of
$10.0 million is available to the Company and the other borrowers
for the issuance of letters of credit, which reduces availability
under the Revolving Credit Facility.
Company and the other named borrowers thereunder are entitled
(subject to the terms and conditions described therein) to
request loans and other financial accommodations in an amount
equal to the lesser of $65.0 million and a borrowing base
composed of accounts receivable and inventory. The Company can
increase the size of the revolving commitments thereunder by an
incremental $40.0 million, subject to the consent of the lenders
providing the incremental commitments. Up to an aggregate of
$10.0 million is available to the Company and the other borrowers
for the issuance of letters of credit, which reduces availability
under the Revolving Credit Facility.
Interest Rates and Commitment Fees
Loans outstanding under the Revolving Loan Agreement accrue
interest at a per annum rate based on (at the Companys election)
the base rate or the LIBOR rate plus a margin determined by
reference to availability under the Revolving Credit Facility as
follows:
interest at a per annum rate based on (at the Companys election)
the base rate or the LIBOR rate plus a margin determined by
reference to availability under the Revolving Credit Facility as
follows:
|
Level
|
Average Daily Availability
|
Base Rate Loans
|
LIBOR Revolver Loans
|
|||||
|
III
|
$24,000,000
|
0.50
|
%
|
1.50
|
%
|
|||
|
II
|
$12,000,000 but $24,000,000
|
0.75
|
%
|
1.75
|
%
|
|||
|
I
|
$12,000,000
|
1.00
|
%
|
2.00
|
%
|
|||
Initially pricing is determined by reference to Level III.
The Company will pay an unused fee to the lenders equal to 0.25%
per annum of the unused amounts under the Revolving Credit
Facility.
per annum of the unused amounts under the Revolving Credit
Facility.
Covenants and Other Terms
The Revolving Loan Agreement includes a springing minimum fixed
charge coverage ratio of 1.0:1.0, calculated when availability is
less than the greater of $5.0 million and 10% of the revolver
commitments.
charge coverage ratio of 1.0:1.0, calculated when availability is
less than the greater of $5.0 million and 10% of the revolver
commitments.
The Revolving Loan Agreement contains customary restrictive
covenants, including, without limitation, limitations on the
ability of the Company and its subsidiaries to incur additional
debt and guarantees; grant liens on assets; pay dividends or make
other distributions; make investments or acquisitions; dispose of
assets; make payments on certain indebtedness; merge, combine
with any other person or liquidate; amend organizational
documents; file consolidated tax returns with entities other than
other borrowers or their subsidiaries; make material changes in
accounting treatment or reporting practices; enter into
restrictive agreements; enter into hedging agreements; engage in
transactions with affiliates; enter into certain employee benefit
plans; amend subordinated debt; and other matters customarily
included in senior secured loan agreements. The Revolving Loan
Agreement also contains customary reporting and other affirmative
covenants.
covenants, including, without limitation, limitations on the
ability of the Company and its subsidiaries to incur additional
debt and guarantees; grant liens on assets; pay dividends or make
other distributions; make investments or acquisitions; dispose of
assets; make payments on certain indebtedness; merge, combine
with any other person or liquidate; amend organizational
documents; file consolidated tax returns with entities other than
other borrowers or their subsidiaries; make material changes in
accounting treatment or reporting practices; enter into
restrictive agreements; enter into hedging agreements; engage in
transactions with affiliates; enter into certain employee benefit
plans; amend subordinated debt; and other matters customarily
included in senior secured loan agreements. The Revolving Loan
Agreement also contains customary reporting and other affirmative
covenants.
The Revolving Loan Agreement contains customary events of
default, including, without limitation, nonpayment of obligations
under the revolving credit facility when due; material inaccuracy
of representations and warranties; violation of covenants in the
Revolving Loan Agreement and certain other documents executed in
connection therewith; breach or default of agreements related to
material debt; revocation or attempted revocation of guarantees;
denial of the validity or enforceability of the loan documents or
failure of the loan documents to be in full force and effect;
certain material judgments; certain events of bankruptcy or
insolvency; certain Employee Retirement Income Securities Act
events; and a change in control of the Company. Certain of the
defaults are subject to exceptions, materiality qualifiers, grace
periods and baskets customary for credit facilities of this type.
default, including, without limitation, nonpayment of obligations
under the revolving credit facility when due; material inaccuracy
of representations and warranties; violation of covenants in the
Revolving Loan Agreement and certain other documents executed in
connection therewith; breach or default of agreements related to
material debt; revocation or attempted revocation of guarantees;
denial of the validity or enforceability of the loan documents or
failure of the loan documents to be in full force and effect;
certain material judgments; certain events of bankruptcy or
insolvency; certain Employee Retirement Income Securities Act
events; and a change in control of the Company. Certain of the
defaults are subject to exceptions, materiality qualifiers, grace
periods and baskets customary for credit facilities of this type.
Voluntary prepayments of amounts outstanding under the Revolving
Credit Facility are permitted at any time, without premium or
penalty, other than in respect of customary LIBOR breakage costs,
if applicable.
Credit Facility are permitted at any time, without premium or
penalty, other than in respect of customary LIBOR breakage costs,
if applicable.
The Revolving Loan Agreement requires the borrowers to make
mandatory prepayments with the receipt of any proceeds of certain
dispositions, insurance or condemnation awards paid in respect of
any receivables, inventory and other revolving credit priority
collateral.
mandatory prepayments with the receipt of any proceeds of certain
dispositions, insurance or condemnation awards paid in respect of
any receivables, inventory and other revolving credit priority
collateral.
A copy of the Revolving Loan Agreement is attached as Exhibit
10.2 to this Current Report on Form 8-K and is incorporated by
reference herein. The description of the material terms of the
Revolving Loan Agreement is qualified in its entirety by
reference to such exhibit.
10.2 to this Current Report on Form 8-K and is incorporated by
reference herein. The description of the material terms of the
Revolving Loan Agreement is qualified in its entirety by
reference to such exhibit.
Item 1.02. Termination of a Material Definitive Agreement.
On April 12, 2017, the Company issued a notice of redemption in
respect of its 2019 Notes and deposited with the 2019 Notes
Trustee the proceeds of the Term Loan Facility, together with
sufficient funds from the Companys balance sheet cash in an
amount sufficient to discharge the Companys obligations under the
2019 Indenture, the 2019 Notes and related agreements.
respect of its 2019 Notes and deposited with the 2019 Notes
Trustee the proceeds of the Term Loan Facility, together with
sufficient funds from the Companys balance sheet cash in an
amount sufficient to discharge the Companys obligations under the
2019 Indenture, the 2019 Notes and related agreements.
This discharge will not result in a loss on extinguishment of
debt. The Company will incur non-cash write off relating to
deferred financing costs of the 2019 Notes of approximately $1.6
million in its statement of income for the quarter ending June
30, 2017.
debt. The Company will incur non-cash write off relating to
deferred financing costs of the 2019 Notes of approximately $1.6
million in its statement of income for the quarter ending June
30, 2017.
Item 2.03. Creation of a Direct Financial Obligation or an
Obligation Under an Off-Balance Sheet Arrangement of a
Registrant.
Obligation Under an Off-Balance Sheet Arrangement of a
Registrant.
The information set forth under Item 1.01 of this Current Report
on Form 8-K is hereby incorporated by reference into this Item
2.03.
on Form 8-K is hereby incorporated by reference into this Item
2.03.
Item 8.01. Other Events.
On April 12, 2017, the Company issued a press release announcing
the aforementioned transactions and the early redemption of the
2019 Notes described above. A copy of this press release is
attached as Exhibit 99.1 to this Current Report on Form 8-K and
is incorporated herein by reference.
the aforementioned transactions and the early redemption of the
2019 Notes described above. A copy of this press release is
attached as Exhibit 99.1 to this Current Report on Form 8-K and
is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
|
Exhibit No.
|
Description
|
|
|
10.01
|
Term Loan Agreement, dated as of April 12, 2017, by and
among the Company, Bank of America, N.A., as administrative agent, and other lender parties thereto. |
|
|
10.02
|
Third Amended and Restated Loan and Security Agreement,
dated as of April 12, 2017, by and among the Company, certain of the Companys subsidiaries, as borrowers, and Bank of America, N.A. as agent and other lender parties thereto. |
|
|
99.1
|
Press release, dated April 12, 2017.
|
About Commercial Vehicle Group, Inc. (NASDAQ:CVGI)
Commercial Vehicle Group, Inc. is a supplier of a range of cab-related products and systems. The Company operates through two segments: the Global Truck and Bus Segment (GTB Segment) and the Global Construction and Agriculture Segment (GCA Segment). The GTB Segment manufactures and sells products, which include Seats, Trim, sleeper boxes, cab structures, structural components and body panels, and mirrors and wiper systems. The GCA Segment manufactures and sells the products, which include Electronic wire harness assemblies and Seats, Wiper systems, Office seating, and Aftermarket seats and components. It supplies products for the commercial vehicle market, including the medium-and heavy-duty truck market, the medium-and heavy-construction vehicle market, and the military, bus, agriculture, mining, industrial equipment and off-road recreational markets. It has manufacturing operations in the United States, Mexico, the United Kingdom, Czech Republic, Ukraine, China, India and Australia. Commercial Vehicle Group, Inc. (NASDAQ:CVGI) Recent Trading Information
Commercial Vehicle Group, Inc. (NASDAQ:CVGI) closed its last trading session down -0.17 at 7.06 with 330,683 shares trading hands.
