Ferro Corporation (NYSE:FOE) Files An 8-K Entry into a Material Definitive Agreement
Item1.01
| Entry into a Material Definitive Agreement. |
On February14, 2017, Ferro Corporation (the Company) entered into
the Credit Agreement (the Credit Agreement) with PNC Bank,
National Association (PNC), as the Administrative Agent, the
Collateral Agent and an Issuer, Deutsche Bank AG New York Branch,
as the Syndication Agent and an Issuer, the other agents party
thereto and various financial institutions as lenders (the
Lenders). The Credit Agreement replaces the Companys existing
credit facility entered into on July31, 2014.
The Credit Agreement consists of a $400.0 million secured
revolving line of credit with a term of five years, a $357.5
million secured term loan facility with a term of seven years and
a 250.0million secured euro term loan facility with a term of
seven years. Under the terms of the Credit Agreement, the Company
is entitled, subject to the satisfaction of certain conditions,
to request additional commitments under the revolving line of
credit or term loans in the aggregate principal amount of up to
$250.0 million to the extent that existing or new lenders agree
to provide such additional commitments and/or term loans and
certain additional debt subject to satisfaction of certain
covenant levels.
Certain of the Companys domestic subsidiaries have guaranteed the
Companys obligations under the Credit Agreement and, to a Pledge
and Security Agreement with PNC, as collateral agent, such
obligations are secured by (a)substantially all of the personal
property of the Company and those certain domestic subsidiaries
and (b)a pledge of 50% of the stock of certain of the Companys
domestic subsidiaries (subject to certain exceptions) and 65% of
the stock of certain of the Companys direct foreign subsidiaries.
The interest rates per annum applicable to loans, other than the
euro term loans, under the Credit Agreement will be, at the
Companys option, equal to either a base rate or a Eurocurrency
rate (as defined in the Credit Agreement) or with respect to the
euro term loans, a EURIBOR rate (as defined in the Credit
Agreement) for one-, two-, three- or six-month interest periods
chosen by the Company, in each case plus an applicable margin. In
the case of the U.S. term loans, 2.50%per annum in the case of
the Eurocurrency rate term loans and 1.50%per annum in the case
of base-rate term loans, or, in the case of the euro term loans,
2.75%per annum in the case of EURIBOR rate loans. The applicable
margin percentage for revolving loans and swingline loans is
based on the ratio of (a)the Companys total consolidated debt
outstanding at such time to (b)the Companys Consolidated EBITDA
(as defined in the Credit Agreement) computed for the period of
four consecutive fiscal quarters most recently ended. The range
of the applicable margin percentage is 1.75%per annum to 2.75%per
annum in the case of Eurocurrency rate revolving loans and
0.75%per annum to 1.75%per annum in the case of base-rate
revolving loans.
Interest on base-rate loans is payable quarterly, and interest on
Eurocurrency rate and EURIBOR rate loans is payable at the end of
the applicable Interest Period (as defined in the Credit
Agreement). In addition to interest charges, the Company will pay
a quarterly commitment fee ranging from 0.25% to 0.45% based on
the ratio of (a)the Companys total consolidated debt outstanding
at such time to (b)the Companys Consolidated EBITDA computed for
the period of four consecutive fiscal quarters most recently
ended.
The Credit Agreement contains customary restrictive and financial
covenants, including covenants regarding the Companys outstanding
indebtedness and, solely with respect to the Revolving Loans (as
defined in the Credit Agreement), maximum leverage ratio. The
Credit Agreement also contains standard provisions relating to
conditions of borrowing. In addition, the Credit Agreement
contains customary events of default, including the non-payment
of obligations by the Company and the bankruptcy of the Company.
If an event of default occurs, all amounts outstanding under the
Credit Agreement may be accelerated and become immediately due
and payable.
PNC and certain of the agents and Lenders party to the Credit
Agreement (and each of their respective subsidiaries or
affiliates) have in the past provided, and may in the future
provide, investment banking, cash management, underwriting,
lending, commercial banking, trust, leasing services, foreign
exchange and other advisory services to, or engage in
transactions with, the Company and its subsidiaries or
affiliates. These parties have received, and may in the future
receive, customary compensation from the Company and its
subsidiaries or affiliates, for such services.
The foregoing is a summary of the material terms and conditions
of the Credit Agreement and not a complete description of the
Credit Agreement. Accordingly, the foregoing is qualified in its
entirety by reference to the full text of the Credit Agreement
attached to this Current Report as Exhibit 10.1, which is
incorporated herein by reference.
| Item2.03 |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The description of the Credit Agreement set forth under Item1.01
of this Current Report on Form 8-K is incorporated into this
Item2.03 by reference.
| Item7.01 | Regulation FD Disclosure. |
On February14, 2017, the Company issued a press release (the
Press Release), announcing its entry into the Credit Agreement. A
copy of the Press Release is attached hereto as Exhibit 99.1 and
is incorporated into this Item7.01 by reference.
| Item9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
|
Exhibit Number |
Description |
|
| 10.1 |
Credit Agreement, dated as of February14, 2017, among Ferro Corporation, the lenders party thereto, PNC Bank, National Association, as the administrative agent, collateral agent and a letter of credit issuer, Deutsche Bank AG New York Branch, as the syndication agent and as a letter of credit issuer, and the various financial institutions and other persons from time to time party thereto |
|
| 99.1 | Press Release |
About Ferro Corporation (NYSE:FOE)
Ferro Corporation (Ferro) produces performance materials for a range of manufacturers in diversified industries throughout the world. The Company uses inorganic and organic chemical processes, polymer science and materials science to develop and produce these performance materials. The Company’s segments include Performance Coatings; Performance Colors and Glass, and Pigments, Powders and Oxides. The Company produces its products primarily in the Europe-Middle East region, the United States, the Asia-Pacific region and Latin America. The Company sells its products directly to customers and through the use of agents or distributors throughout the world. The Company operates approximately 40 facilities around the world that manufacture various types of performance materials, including frits, porcelain and other glass enamels, glazes, stains, decorating colors, pigments, inks, polishing materials, specialty dielectrics, electronic glasses and other specialty coatings. Ferro Corporation (NYSE:FOE) Recent Trading Information
Ferro Corporation (NYSE:FOE) closed its last trading session up +0.01 at 14.18 with 229,553 shares trading hands.