Graham Corporation (NYSE:GHM) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
On October 8, 2019, Graham Corporation (the Company) entered into a letter agreement (the Letter Agreement) with HSBC Bank USA, National Association (HSBC), that amended and restated the facility letter dated March 24, 2014 between the Company and HSBC. The Letter Agreement increases the Companys uncommitted discretionary demand line of credit with HSBC for the issuance of Performance Standby Letters of Credit, as defined in the Letter Agreement (the Credit Facility), from $5,000,000 to $10,000,000. The Company incurs an annual facility fee under the Credit Facility of $5,000, as well as an annual fee on the undrawn face amount of each letter of credit issued to the Credit Facility, which ranges from 0.65% to 0.75% per annum depending on the term of the letter of credit. Interest is payable on the principal amounts of unreimbursed letter of credit draws under the Credit Facility at a rate of 3% plus HSBCs prime rate. The Companys obligations under the Letter Agreement are secured by certain of the Companys deposit accounts held with HSBC.
Also on October 8, 2019, the Company entered into a letter consent agreement (the Consent) to the credit agreement (the Credit Agreement) dated December 2, 2015 between the Company and JPMorgan Chase Bank, N.A. (JPMorgan), and that certain pledge and security agreement dated December 2, 2015 between the Company and JPMorgan, whereby JPMorgan consented to the Companys entry into the Letter Agreement and agreed to amendments to the Credit Agreement to reflect the increase in the Companys uncommitted discretionary demand line of credit with HSBC to $10,000,000.
The foregoing summaries of the Letter Agreement and the Consent do not purport to be complete, and are qualified in their entirety by reference to the Letter Agreement and the Consent, copies of which will be filed as exhibits to the Companys next Quarterly Report on Form 10-Q.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.