COOPER TIRE & RUBBER COMPANY (NYSE:CTB) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
Credit Agreement Amendment
On February 15, 2018 (the “Closing Date”), Cooper Tire & Rubber Company, a Delaware corporation (the “Company”), entered into Amendment No. 2 to Credit Agreement (the “Amendment”), by and among the Company, the lenders party thereto, and JPMorgan Chase Bank, N.A., as the administrative agent (the “Agent”). The Amendment modified the terms of that certain Credit Agreement, dated as of May 27, 2015 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Revolving Credit Agreement”), by and among the Company, the lenders from time to time party thereto, and the Agent, which amended the terms of the Revolving Credit Agreement to, among other things:
| · | Extend the maturity date of the revolving credit facility to February 15, 2023; |
| · | Modify the definition of Applicable Rate; |
| · | Modify certain negative covenants to permit additional indebtedness and liens by foreign subsidiaries of the Company; |
| · | Modify the asset sale covenant; and |
| · | Increase the basket for permitted dividends. |
The summary set forth in this Current Report on Form 8-K may not contain all the information that is important to you and is qualified in its entirety by reference to the Amendment, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
The Agent and certain of the lenders to the Credit Agreement have in the past provided, currently provide and may in the future provide advisory and lending services to, or engage in transactions with, the Company and its subsidiaries or affiliates (including through certain subsidiaries or affiliates of the Agent and such lenders). These parties have received, and may in the future receive, customary compensation from the Company and its subsidiaries or affiliates for such services and in respect of such transactions.
Second Amended and Restated Receivables Purchase Agreement
On the Closing Date, the Company, Cooper Receivables, LLC, a Delaware limited liability company (“CRLLC”), and PNC Bank, National Association (“PNC”) entered into a Second Amended and Restated Receivables Purchase Agreement (the “Second A&R Receivables Purchase Agreement”). The Second A&R Receivables Purchase Agreement amends and restates the receivables purchase agreement entered into on August 30, 2006 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Existing Receivables Purchase Agreement”). The Second A&R Receivables Purchase Agreement amended and restated the terms of the Existing Receivables Purchase Agreement to, among other things:
| · | Extend the maturity date from May 27, 2018 to February 12, 2021; |
| · | Modify various provisions relating to Letters of Credit; and |
| · | Eliminate the concept of a Minimum Usage Amount. |
The Second A&R Receivables Purchase Agreement has a purchase limit of $150,000,000. The interest rate spread of the receivables facility is between 0.50% and 4.00% based on interest rate type, and the servicing fee of the receivables facility is 1.00%. The Second A&R Receivables Purchase Agreement contains customary representations, warranties, covenants and events of default. Other material terms are consistent with the terms of the Existing Receivables Purchase Agreement.
The summary set forth in this Current Report on Form 8-K may not contain all the information that is important to you and is qualified in its entirety by reference to the Second A&R Receivables Purchase Agreement, a copy of which is attached hereto as Exhibit 10.2 and incorporated herein by reference.
PNC has in the past provided, currently provides and may in the future provide advisory and lending services to, or engage in transactions with, the Company and its subsidiaries or affiliates (including through certain subsidiaries or affiliates of PNC). PNC has received, and may in the future receive, customary compensation from the Company and its subsidiaries or affiliates for such services and in respect of such transactions.
| Item 2.03 | Creation of a Direct Financial Obligation. |
The information set forth in “Item 1.01. Entry into a Material Definitive Agreement” is hereby incorporated by reference into this “Item 2.03. Creation of a Direct Financial Obligation.”
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On February 16, 2018, John H. Shuey, a member of the Board of Directors (the "Board"), informed the Board of his intention to retire as a director of the Company at the end of his current term and not stand for re-election at the Company's 2018 Annual Meeting of Stockholders. Mr. Shuey has served as a director of the Company since 1996. Mr. Shuey, age 72, has reached the retirement age for the Board and his decision not to stand for re-election was based on personal reasons and not the result of any disagreement with the Company.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit Number | Description |
| 10.1 | Amendment No. 2 to Credit Agreement, dated February 15, 2018, by and among Cooper Tire & Rubber Company, the lenders party thereto, and JPMorgan Chase Bank, N.A. |
| 10.2 | Second Amended and Restated Purchase Agreement, dated February 15, 2018, by and among Cooper Receivables LLC, Cooper Tire & Rubber Company, and PNC Bank, National Association |
COOPER TIRE & RUBBER CO ExhibitEX-10.1 2 tv486456_ex10-1.htm EXHIBIT 10.1 Exhibit 10.1 Execution Copy AMENDMENT NO. 2 TO CREDIT AGREEMENT This Amendment No. 2 to Credit Agreement,…To view the full exhibit click here
About COOPER TIRE & RUBBER COMPANY (NYSE:CTB)
Cooper Tire & Rubber Company (Cooper) is a manufacturer and marketer of replacement tires. The Company specializes in the design, manufacture, marketing and sales of passenger car and light truck tires. Cooper and its subsidiaries sell medium truck, motorcycle and racing tires. It has four business segments: North America, composed of its operations in the United States and Canada; Latin America, composed of its operations in Mexico, Central America and South America; Europe, and Asia. The North America and Latin America segments are presented as the Americas Tire Operations segment. The results of the combined Asia and Europe segments are presented as International Tire Operations segment. Cooper and its family of companies operate approximately eight manufacturing facilities and over 20 distribution centers in over 10 countries. Its Americas Tire Operations segment manufactures and markets passenger car and light truck tires, for sale in the United States replacement market.