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

On April 28, 2017, KEMET Corporation (the Company or “KEMET”)
entered into a Term Loan Credit Agreement (the Term Loan Credit
Agreement) by and among the Company, KEMET Electronics
Corporation (KEC) (together with the Company, the Borrowers), the
Subsidiary Guarantors party thereto, the Lenders party thereto,
Bank of America, N.A. as the Administrative Agent and Collateral
Agent, and Merill Lynch, Pierce, Fenner Smith Incorporated, as
sole lead arranger and bookrunner.

The Term Loan Credit Agreement provides for a $345 million term
loan facility. In addition, the Borrowers may request incremental
term loan commitments in an aggregate amount not to exceed $50
million. The proceeds are being used, together with cash on hand,
to fund the redemption of all of KEMETs outstanding 10% Senior
Notes due 2018 (the Senior Notes), which were also called for
redemption on April 28, 2017. The Term Loans were sold at 97
(with an original issue discount of 300 bps). At the Companys
election, the Term Loans may be made as either Base Rate Term
Loans or LIBO Rate Term Loans. The applicable margin for term
loans is 5.0% for Base Rate Term Loans and 6.0% for LIBO Rate
Term Loans (each as defined in the Term Loan Credit Agreement).
All LIBO Rate Term Loans are subject to a pre-margin floor of
1.00%. The Term Loans reflect a current Corporate Rating of B3/B.
The Term Loan Credit Agreement contains customary covenants and
events of default. The Company also entered into the Term Loan
Security Agreement dated as of April 28, 2017 (the Security
Agreement), among the Company, KEMET, the other Grantors party
thereto, and Bank of America, N.A., as collateral agent, to which
the Companys obligations under the Term Loan Credit Agreement are
secured by a pledge of 65% of the outstanding voting stock of
certain first-tier subsidiaries organized in Italy, Japan, Mexico
and Singapore, and a second lien pledge on the collateral
securing KEMETs revolving credit facility. The obligations of the
Company under the Term Loan Credit Agreement are guaranteed by
certain of its subsidiaries, including KRC Trade Corporation,
KEMET Services Corporation, KEMET Blue Powder Corporation and The
Forest Electric Company. The Term Loans mature April 28, 2024,
and may be extended in accordance with the Term Loan Credit
Agreement. The Company may prepay loans under the Term Loan
Credit Agreement at any time, subject to certain notice
requirements and certain prepayment premiums during the first two
years.

In connection with the closing of the new Term Loan Credit
Facility, KEMET also entered into Amendment No. 9 to Loan and
Security Agreement, Waiver and Consent, dated as of April 28,
2017, by and among KEMET, the other borrowers named therein, the
financial institutions party thereto as lenders and Bank of
America, N.A., a national banking association, as agent for the
lenders (the Loan Amendment). The Loan Amendment provides KEMET
with lower pricing and the ability to complete the refinancing.
As part of the overall refinancing, KEMET also repaid all amounts
outstanding under the Loan Amendment.

Certain of the lenders under the Term Loan Credit Agreement and
the Loan Amendment and their affiliates may now or in the future
have various relationships with the Company and its subsidiaries
involving the provision of financial services, such as investment
banking, commercial banking, financial advisory, cash management,
custody and corporate credit card services and interest rate
hedging for which they will receive customary fees.

The foregoing descriptions of the Term Loan Credit Agreement, the
Security Agreement and the Loan Amendment do not purport to be
complete and are qualified in their entirety by reference to the
full text of the Term Loan Credit Agreement, Security Agreement
and Loan Amendment, which are filed as Exhibit 10.1, Exhibit 10.2
and Exhibit 10.3, respectively, to this Form 8-K and are
incorporated herein by reference. A copy of the press release
announcing the Term Loan Credit Agreement is attached as Exhibit
99.1 to this Current Report on Form 8-K.

Item 2.01 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangment of a Registrant.

In connection with the entry into the Term Loan Credit Agreement
described in Item 1.01 above, on April 28, 2017, the Company
provided notice (the Notice of Full Redemption) to Wilmington
Trust Company, as trustee (the Trustee), of its intent to redeem
all of its outstanding Senior Notes, to the Indenture, dated as
of May 5, 2010, as supplemented (the Indenture), among the
Company, the guarantors from time to time party thereto, and the
Trustee. The Notice of Full Redemption was sent by the Trustee to
the registered holders of the Senior Notes in accordance with the
requirements of the Indenture on April 28, 2017. The redemption
date is May 29, 2017. The redemption price will be equal to
100.00% of the principal amount of the Senior Notes, plus accrued
but unpaid interest up to, but not including, the Redemption
Date.

This report does not constitute a notice of redemption under the
Indenture nor an offer to tender for, or purchase, any Senior
Notes or any other security.

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 above is hereby
incorporated by reference into this Item 2.03.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits