ENGILITY HOLDINGS, INC. (NYSE:EGL) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry Into a Material Definitive Agreement.
On February 13, 2017 (the “Amendment Effective Date”), Engility Holdings, Inc., a Delaware corporation (the “Company”), and Engility Corporation, a Massachusetts corporation and a wholly owned subsidiary of the Company (the “Borrower”), entered into Amendment No. 1 (the “Amendment”) to the Credit Agreement, dated as of August 12, 2016, among the Borrower, the Company, the several lenders from time to time parties thereto and Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent (“Morgan Stanley”).
The parties entered into the Amendment in order to reduce the interest rate margins applicable to (i) the Borrower’s senior secured term B1 loan facility in the original principal amount of $200 million (“Existing Term B1 Loans”) from 3.25% to 2.25%, in the case of alternate base rate loans, and from 4.25% to 3.25%, in the case of Eurocurrency loans, and (ii) the Borrower’s senior secured term B2 loan facility in the original principal amount of $680 million (“Existing Term B2 Loans”) from 3.75% to 2.75%, in the case of alternate base rate loans, and from 4.75% to 3.75%, in the case of Eurocurrency loans. The Amendment was accomplished by (i) the Borrower obtaining new term B1 loan commitments (“Term B1 Loans”) to refinance the Existing Term B1 Loans and Morgan Stanley making additional Term B1 Loans to the Borrower in a principal amount equal to $195.0 million minus the principal amount of any Existing Term B1 Loans outstanding on the Amendment Effective Date that were converted into Term B1 Loans on the Amendment Effective Date, and (ii) the Borrower obtaining new term B2 loan commitments (“Term B2 Loans”) to refinance the Existing Term B2 Loans and Morgan Stanley making additional Term B2 Loans to the Borrower in a principal amount equal to $608.0 million minus the principal amount of any Existing Term B2 Loans outstanding on the Amendment Effective Date that were converted into Term B2 Loans on the Amendment Effective Date. The proceeds of the Term B1 Loans and Term B2 Loans, respectively, will be applied to repay in full the Existing Term B1 Loans and Existing Term B2 Loans, respectively, outstanding as of the Amendment Effective Date. The transaction is expected to lower the Company’s fiscal year 2017 interest expense by approximately $5 million after fees and expenses.
The foregoing description of the Amendment is qualified in its entirety by reference to such document, a copy of which will be filed with the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 and which is incorporated into this Item 1.01 by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information contained in Item 1.01 with respect to the Amendment is incorporated herein by reference.
ENGILITY HOLDINGS, INC. (NYSE:EGL) Recent Trading Information
ENGILITY HOLDINGS, INC. (NYSE:EGL) closed its last trading session down -0.89 at 31.16 with 109,872 shares trading hands.