Graham Corporation (NYSE:GHM) Files An 8-K Entry into a Material Definitive Agreement

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 Company’s 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 HSBC’s prime rate. The Company’s obligations under the Letter Agreement are secured by certain of the Company’s 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 Company’s entry into the Letter Agreement and agreed to amendments to the Credit Agreement to reflect the increase in the Company’s 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 Company’s 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.

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About Graham Corporation (NYSE:GHM)

Graham Corporation designs, manufactures and sells critical equipment for the energy, defense and chemical/petrochemical industries. The Company designs and manufactures custom-engineered ejectors, vacuum pumping systems, surface condensers and vacuum systems. It is a nuclear code accredited fabrication and specialty machining company. It supplies components used inside reactor vessels and outside containment vessels of nuclear power facilities. Its equipment is found in applications, such as metal refining, pulp and paper processing, water heating, refrigeration, desalination, food processing, pharmaceutical, heating, ventilating and air conditioning. For the defense industry, its equipment is used in nuclear propulsion power systems for the United States Navy. The Company’s products are used in a range of industrial process applications in energy markets, including petroleum refining, defense, chemical and petrochemical processing, power generation/alternative energy and other.

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