Hexcel Corporation (NYSE:HXL) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.
On June 20, 2019, Hexcel Corporation (“Hexcel”) entered into a new credit agreement (the “Credit Agreement”) governing its unsecured $1,000 million revolving credit facility (the “Revolver”), which matures on June 20, 2024. The Credit Agreement was entered into by and among Hexcel, as borrower, the lenders party thereto, Citizens Bank, N.A., as agent for the lenders, Citizens Bank, N.A., BofA Securities, Inc., TD Bank, N.A. and Wells Fargo Securities, LLC, as joint bookrunners and joint lead arrangers, Bank of America, N.A., TD Bank N.A., and Wells Fargo Bank, National Association, as syndication agents, and Goldman Sachs Bank USA, HSBC Bank USA, N.A., JPMorgan Chase Bank, N.A., PNC Bank, National Association, SunTrust Bank and U.S. Bank National Association, as co-documentation agents.
On June 20, 2019, Hexcel borrowed $408 million under the Credit Agreement, the proceeds of which were used to repay all amounts, and terminate all commitments, outstanding under the existing credit agreement by and among Hexcel, as borrower, and its wholly-owned Luxembourg subsidiary, Hexcel Holdings Luxembourg S.à.r.l., as co-borrower, and the lenders party thereto, Citizens Bank, National Association, as administrative agent for the lenders, Citizens Bank, National Association, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities, LLC, as joint book managers and joint lead arrangers, Bank of America, N.A. and Wells Fargo Bank, National Association, as syndication agents, and Sumitomo Mitsui Banking Corporation, SunTrust Bank, TD Bank, N.A. and U.S. Bank, National Association, as documentation agents (the “Terminated Credit Facility”) and to pay fees and expenses in connection with the refinancing. The Terminated Credit Facility was scheduled to expire on June 9, 2021. No early termination penalties were incurred by Hexcel as a result of the termination of the Terminated Credit Facility.
Borrowings under the Revolver will bear interest, at Hexcel’s option, for Eurodollar rate borrowings at (i) an Adjusted LIBO rate, plus the Applicable Margin, or (ii) for base rate borrowings, the greatest of (a) the prime rate, (b) the NYFRB rate plus 0.50% and (c) the Adjusted LIBO rate for a one-month interest period plus 1.00%, in each case plus the Applicable Margin. The “Applicable Margin” initially is 1.00% for Eurodollar rate borrowings and 0.00% for base rate borrowings, and after the date on which the Agent receives a compliance certificate for the fiscal quarter ending December 31, 2019, can fluctuate, determined by reference to the more favorable to the Borrower of (x) the Borrower’s public debt rating and (y) the Borrower’s leverage ratio, as specified in the Credit Agreement. Revolving loans may be borrowed, repaid and re-borrowed, and are available for general corporate purposes (including acquisitions, investments and repayments of indebtedness). Up to $50 million of the Revolver may be used for letters of credit. The Credit Agreement enables Hexcel, from time to time, to add term loans or to increase the revolving credit commitment in an aggregate amount not to exceed $500 million.
The Credit Agreement contains customary covenants that place restrictions on, among other things, the incurrence of debt by any subsidiaries of the Borrower, granting of liens and sale of all or substantially all of the assets of the Borrower and its subsidiaries taken as a whole. The Credit Agreement also contains financial covenants that require Hexcel to maintain a minimum interest coverage ratio and a maximum leverage ratio. A violation of any of these covenants could result in an event of default under the Credit Agreement. Upon the occurrence of such an event of default or certain other customary events of default, payment of any outstanding amounts under the Revolver may be accelerated and the lenders’ commitments to extend credit under the Credit Agreement may be terminated.
The foregoing summary of the Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Credit Agreement, which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Item 1.02. Termination of a Material Definitive Agreement.
The information with respect to the Terminated Credit Facility set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein 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 with respect to the Credit Agreement set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits to this Form 8-K
| 10.1 | Credit Agreement, dated as of June 20, 2019, by and among Hexcel Corporation as borrower, the lenders party thereto, Citizens Bank, N.A., as agent for the lenders, Citizens Bank, N.A., BofA Securities, Inc., TD Bank, N.A. and Wells Fargo Securities, LLC, as joint bookrunners and joint lead arrangers, Bank of America, N.A., TD Bank N.A., and Wells Fargo Bank, National Association, as syndication agents, and Goldman Sachs Bank USA, HSBC Bank USA, N.A., JPMorgan Chase Bank, N.A., PNC Bank, National Association, SunTrust Bank and U.S. Bank National Association, as co-documentation agents. |
HEXCEL CORP /DE/ Exhibit
EX-10.1 2 c93832_ex10-1.htm Exhibit 10.1 Execution Version U.S. $1,…
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About Hexcel Corporation (NYSE:HXL)
Hexcel Corporation is a composites company. The Company develops, manufactures and markets structural materials, including carbon fibers, reinforcements, prepregs and other fiber-reinforced matrix materials, honeycomb, adhesives, engineered honeycomb and composite structures for use in commercial aerospace, space and defense and industrial markets. It operates through two segments, including Composite Materials and Engineered Products. The Composite Materials segment consists of its carbon fiber, reinforcements, resins, prepregs and other fiber-reinforced matrix materials, and honeycomb core product lines. The Engineered Products segment consists of lightweight composite structures, molded components, engineered core and honeycomb products with added functionality. Its products are used in a range of end applications, such as commercial and military aircraft, space launch vehicles and satellites, wind turbine blades, automotive, recreational products and other industrial applications.