FLOWSERVE CORPORATION (NYSE:FLS) Files An 8-K Entry into a Material Definitive AgreementItem 1.01.
On June30, 2017, Flowserve Corporation, a New York corporation (the “Company”), entered into a fourth amendment (the “Amendment”) to its existing credit agreement, dated August20, 2012, as supplemented or otherwise modified from time to time (the “Credit Agreement”). The parties to the Amendment are the Company, Bank of America, N.A., as administrative agent, and the other lenders party thereto.
The Amendment modified the Credit Agreement to, among other things:
| 1) | decrease the revolving credit commitment from $1billion to $800million; |
| 2) | revise the restrictions on the Company’s ability to incur debt, specifically to (i)decrease the maximum principal amount of priority debt allowed from 15% to 7.5% of the consolidated tangible assets of the Company and (ii)decrease the maximum amount of receivables the Company can securitize from $200million to $100million; |
| 3) | increase the consolidated leverage ratio from 3.50 to 1.00 to 4.00 to 1.00 through June30, 2019, when it will decrease to 3.75 to 1.00; and |
| 4) | amend the “Applicable Rate” to increase the interest rate margin for LIBOR loans from 1.75% to 2.00% and for base rate loans from 0.75% to 1.00%, in each case, if the Company’s non-credit enhanced, senior unsecured long-term debt rating of Moody’s/S&P is Ba2/BB or worse. |
All other material terms of the Credit Agreement remain the same and are described in more detail in the Company’s Current Reports on Form 8-K previously filed on August20, 2012, October8, 2013 and October19, 2015, relating to the Credit Agreement.
The descriptions of the provisions of the Amendment and the Credit Agreement are summary in nature and are qualified in their entirety by reference to the full and complete terms of the definitive agreements. A copy of the Amendment is filed as Exhibit 10.1 to this Current Report on Form 8-K.
| Item 1.01 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The disclosures required by this Item 1.01 are incorporated herein by reference to the disclosures contained under Item 1.01 above.
| Item 1.01 | Financial Statements and Exhibits. |
(d) Exhibits.
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Exhibit No. |
Description |
| 10.1 | Fourth Amendment to Credit Agreement, dated June30, 2017, among Flowserve Corporation, Bank of America, N.A., as administrative agent, and the other lenders referred to therein. |
FLOWSERVE CORP ExhibitEX-10.1 2 d416639dex101.htm EX-10.1 EX-10.1 Exhibit 10.1 FOURTH AMENDMENT TO CREDIT AGREEMENT THIS FOURTH AMENDMENT TO CREDIT AGREEMENT,…To view the full exhibit click here
About FLOWSERVE CORPORATION (NYSE:FLS)
Flowserve Corporation is a manufacturer and aftermarket service provider of flow control systems. The Company operates through three segments: Engineered Product Division (EPD), Industrial Product Division (IPD) and Flow Control Division (FCD). Its EPD designs, manufactures, distributes and services engineered pumps and pump systems, mechanical seals, auxiliary systems, replacement parts and related equipment. Its IPD designs, manufactures, distributes and services pre-configured engineered pumps and pump systems, including submersible motors, for industrial markets. Its FCD designs, manufactures, distributes and services a portfolio of industrial valve and automation solutions, including isolation and control valves, actuation, controls and related equipment. Its product portfolio of pumps, valves, seals, automation and aftermarket services support infrastructure industries, including oil and gas, chemical, power generation and water management.