LEAR CORPORATION (NYSE:LEA) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement.
On August8, 2017, Lear Corporation (the “Company”) entered into a credit agreement among the Company, the foreign subsidiary borrowers from time to time party thereto, the lenders from time to time party thereto, HSBC Securities (USA) Inc., as syndication agent, Barclays Bank PLC, Citibank N.A. and Merrill Lynch, Pierce, Fenner& Smith Incorporated, as co-documentation agents, and JPMorgan Chase Bank, N.A., as administrative agent (the “Credit Agreement”) and fully repaid and terminated its existing revolving credit facility and term loan facility. The Credit Agreement provides for aggregate financing of $2.0billion, consisting of a $1.75billion unsecured revolving credit facility, which facility matures on August8, 2022 (the “Revolving Credit Facility”) and a $250.0million unsecured term loan facility, which facility matures on August8, 2022 (the “Term Loan”). The Credit Agreement also includes an incremental facility, which provides the ability to borrow up to $500.0million of incremental term or revolving loans, subject to certain terms and conditions.
The Revolving Credit Facility permits borrowings for general corporate and working capital purposes and the issuance of letters of credit. The Term Loan permits borrowings for general corporate and working capital purposes. At the closing of the Credit Agreement, the Company used $250.0million under the Term Loan, together with borrowings under the Revolving Credit Facility and cash on hand, to repay all amounts outstanding under its prior credit facility.
Upon termination of the Company’s prior credit facility at the closing of the Credit Agreement, the Company’s subsidiaries that guarantee the Company’s outstanding 4.75% senior notes due 2023, 5.375% senior notes due 2024 and 5.25% senior notes due 2025 (collectively, the “Existing Notes”) were automatically released as guarantors under the Existing Notes in accordance with the terms of the indentures governing the Existing Notes.
Loans under the Revolving Credit Facility bear interest based on the Eurocurrency rate or base rate plus a margin, determined in accordance with a pricing grid, ranging from 1.00% to 1.60% for Eurocurrency and 0.00% to 0.60% for base rate. In addition, a facility fee is payable on the Revolving Credit Facility at a rate, determined in accordance with a pricing grid, ranging from 0.125% to 0.30%.
Loans under the Term Loan bear interest based on the Eurocurrency rate or base rate plus a margin, determined in accordance with a pricing grid, ranging from 1.125% to 1.90% for Eurocurrency and 0.125% to 0.90% for base rate.
As of August8, 2017, we were in compliance with all covenants under our Credit Agreement.
The descriptions of the Credit Agreement set forth above are qualified in their entirety by reference to the Credit Agreement filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference herein.
Section2 – Financial Information
Item 1.01. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of the Registrant.
The information provided in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 1.01.
Section7 – Regulation FD
Item 1.01. Regulation FD Disclosure.
On August8, 2017, the Company issued a press release announcing the Credit Agreement, which is attached as Exhibit 99.1 hereto.
The information contained in this Item 1.01 and Exhibit 99.1 hereto shall not be deemed “filed” for purposes of Section18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by reference in such a filing.
Section9 – Financial Statements and Exhibits
Item 1.01 Financial Statements and Exhibits.
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Exhibit No. |
Description |
| 10.1 | Credit Agreement, dated as of August8, 2017, among the Company, the foreign subsidiary borrowers from time to time party thereto, the lenders from time to time party thereto, HSBC Securities (USA) Inc., as syndication agent, Barclays Bank PLC, Citibank N.A. and Merrill Lynch, Pierce, Fenner& Smith Incorporated, as co-documentation agents, and JPMorgan Chase Bank, N.A., as administrative agent. |
| 99.1 | Press Release, dated August8, 2017, announcing the Credit Agreement |
LEAR CORP ExhibitEX-10.1 2 d437551dex101.htm EX-10.1 EX-10.1 Exhibit 10.1 EXECUTION VERSION CREDIT AGREEMENT among LEAR CORPORATION,…To view the full exhibit click here
About LEAR CORPORATION (NYSE:LEA)
Lear Corporation (Lear) is a supplier to the global automotive industry. The Company is engaged in supplying seating, electrical distribution systems and electronic modules, as well as related sub-systems, components and software, to automotive manufacturers. The Company operates through two segments: seating and electrical. The seating segment consists of the design, development, engineering, assembly and delivery of seat systems, as well as the design, development, engineering and manufacture of seat components, including seat covers and surface materials. Its electrical segment consists of the design, development, engineering and manufacture of electrical distribution systems that route electrical signals and manage electrical power within a vehicle. It has over 240 manufacturing, engineering and administrative locations in approximately 40 countries. It has automotive content on over 350 vehicle nameplates across the world.
