SPECTRUM BRANDS HOLDINGS, INC. (NYSE:SPB) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.
Second Amendment to Credit Agreement.
On March 6, 2017, Spectrum Brands, Inc. (Spectrum Brands)
(a wholly-owned direct subsidiary of SB/RH Holdings, LLC
(SB/RH Holdings), which is a wholly-owned direct
subsidiary of Spectrum Brands Holdings, Inc.) and SB/RH Holdings
entered into the second amendment (the Second Amendment,
and, together with the first amendment, the Amendments) to
the credit agreement, dated as of June 23, 2015 (the Credit
Agreement), by and among Spectrum Brands, SB/RH Holdings,
Deutsche Bank AG New York Branch (as the administrative agent)
and the lenders party thereto from time to time.
(a wholly-owned direct subsidiary of SB/RH Holdings, LLC
(SB/RH Holdings), which is a wholly-owned direct
subsidiary of Spectrum Brands Holdings, Inc.) and SB/RH Holdings
entered into the second amendment (the Second Amendment,
and, together with the first amendment, the Amendments) to
the credit agreement, dated as of June 23, 2015 (the Credit
Agreement), by and among Spectrum Brands, SB/RH Holdings,
Deutsche Bank AG New York Branch (as the administrative agent)
and the lenders party thereto from time to time.
The Second Amendment modified certain terms of the Credit
Agreements Revolving Facility (as defined below), including
extending its maturity, increasing the aggregate commitment
amount of the U.S. dollar tranche of the Revolving Facility,
reducing the aggregate commitment amount of the multi-currency
tranche of the Revolving Facility and adjusting interest rate
margins and unused commitment fees.
Agreements Revolving Facility (as defined below), including
extending its maturity, increasing the aggregate commitment
amount of the U.S. dollar tranche of the Revolving Facility,
reducing the aggregate commitment amount of the multi-currency
tranche of the Revolving Facility and adjusting interest rate
margins and unused commitment fees.
Summary of Credit Agreement Terms.
Upon consummation of the Second Amendment, the materials terms
of the Credit Agreement are as follows:
of the Credit Agreement are as follows:
Facilities under the Credit Agreement.
The facilities under the Credit Agreement consist of:
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(1)
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a $1.003 billion USD term loan facility due June 23, 2022
(the USD Term Loan Facility); |
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(2)
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a CAD$73.9 million CAD term loan facility due June 23,
2022 (the CAD Term Loan Facility); |
| (3) |
a 54.7 million Euro term loan facility due June 23, 2022 (the Euro Term Loan Facility, and, together with the CAD Term Loan Facility and the USD Term Loan Facility, the Term Loan Facilities); and |
| (4) |
a $700 million revolving credit facility (with a U.S. dollar tranche and a multicurrency tranche), which matures on March 6, 2022 (the Revolving Facility). |
Revolving Facility Commitments.
The aggregate commitment amount of the U.S. dollar tranche of the
Revolving Facility is $600 million and the aggregate commitment
amount of the multi-currency tranche of the Revolving Facility is
$100 million. At March 6, 2017, $370 million is available under
the U.S. dollar tranche of the Revolving Facility and $100
million is available under the multi-currency tranche of the
Revolving Facility. The commitment fee rate will be equal to .35%
of the unused commitment amounts, which may be reduced by .05%
based on achieving a certain total net leverage ratio specified
in the Credit Agreement.
Revolving Facility is $600 million and the aggregate commitment
amount of the multi-currency tranche of the Revolving Facility is
$100 million. At March 6, 2017, $370 million is available under
the U.S. dollar tranche of the Revolving Facility and $100
million is available under the multi-currency tranche of the
Revolving Facility. The commitment fee rate will be equal to .35%
of the unused commitment amounts, which may be reduced by .05%
based on achieving a certain total net leverage ratio specified
in the Credit Agreement.
Incremental Facilities.
The Credit Agreement allows Spectrum Brands and certain of its
subsidiaries, subject to certain conditions, to increase the
amount of the commitments thereunder by an aggregate incremental
amount not to exceed at the time of incurrence the sum of (x)
$900 million (the Dollar Prong) plus (y) all voluntary
prepayments (unless funded by a contemporaneous refinancing or
new long-term indebtedness) of the credit facilities. Incremental
amounts may be incurred in reliance on the basket in clause (x)
or clause (y) plus (z) additional amounts so long as on the date
of incurrence thereof (or, at Spectrum Brands option, on the date
of establishment of the commitments in respect thereof), the
First Lien Leverage Ratio (as defined in the Credit Agreement) on
a pro forma basis would not exceed 3.25:1.00. As of the date
hereof, Spectrum Brands has not utilized any portion of the
Dollar Prong to incur indebtedness under incremental facilities.
subsidiaries, subject to certain conditions, to increase the
amount of the commitments thereunder by an aggregate incremental
amount not to exceed at the time of incurrence the sum of (x)
$900 million (the Dollar Prong) plus (y) all voluntary
prepayments (unless funded by a contemporaneous refinancing or
new long-term indebtedness) of the credit facilities. Incremental
amounts may be incurred in reliance on the basket in clause (x)
or clause (y) plus (z) additional amounts so long as on the date
of incurrence thereof (or, at Spectrum Brands option, on the date
of establishment of the commitments in respect thereof), the
First Lien Leverage Ratio (as defined in the Credit Agreement) on
a pro forma basis would not exceed 3.25:1.00. As of the date
hereof, Spectrum Brands has not utilized any portion of the
Dollar Prong to incur indebtedness under incremental facilities.
Interest Rates.
All outstanding amounts under the USD Term Loan Facility (if
funded in U.S. dollars) will bear interest, at Spectrum Brands
option, at a rate per annum equal to (x) the LIBO rate with a
0.75% floor, adjusted for statutory reserves, plus a margin
equal to 2.50% or (y) the Alternate Base Rate (as defined in
the Credit Agreement), with a 1.75% per annum floor, plus a
margin equal to 1.50%.
funded in U.S. dollars) will bear interest, at Spectrum Brands
option, at a rate per annum equal to (x) the LIBO rate with a
0.75% floor, adjusted for statutory reserves, plus a margin
equal to 2.50% or (y) the Alternate Base Rate (as defined in
the Credit Agreement), with a 1.75% per annum floor, plus a
margin equal to 1.50%.
The CAD Term Loan Facility (if funded in Canadian dollars) will
bear interest, at Spectrums option, at a rate per annum equal to
(x) the BA Rate (as defined in the Credit Agreement) with a 0.75%
floor, plus a margin equal to 3.50% or (y) the Canadian Base Rate
(as defined in the Credit Agreement), plus a margin equal to
2.50%.
bear interest, at Spectrums option, at a rate per annum equal to
(x) the BA Rate (as defined in the Credit Agreement) with a 0.75%
floor, plus a margin equal to 3.50% or (y) the Canadian Base Rate
(as defined in the Credit Agreement), plus a margin equal to
2.50%.
The Euro Term Loan Facility (if funded in Euros) will bear
interest at a rate per annum equal to the EURIBOR Rate (as
defined in the Credit Agreement) with a 0.75% per annum floor,
plus a margin equal to 2.75% per annum.
interest at a rate per annum equal to the EURIBOR Rate (as
defined in the Credit Agreement) with a 0.75% per annum floor,
plus a margin equal to 2.75% per annum.
All outstanding amounts under the Revolving Facility (if funded
in U.S. dollars) will bear interest, at Spectrums option, at a
rate per annum equal to (x) the LIBO rate, adjusted for
statutory reserves, plus a margin ranging between 1.75% to
2.25% or (y) the Alternate Base Rate (as defined in the Credit
Agreement), plus a margin ranging between 0.75% to 1.25%.
in U.S. dollars) will bear interest, at Spectrums option, at a
rate per annum equal to (x) the LIBO rate, adjusted for
statutory reserves, plus a margin ranging between 1.75% to
2.25% or (y) the Alternate Base Rate (as defined in the Credit
Agreement), plus a margin ranging between 0.75% to 1.25%.
The Revolving Facility (if funded in Euros) will bear interest
at a rate per annum equal to the EURIBOR Rate (as defined in
the Credit Agreement), plus a margin ranging between 1.75% to
2.25% per annum. The Revolving Facility (if funded in Canadian
dollars) will bear interest, at Spectrums option, at a rate per
annum equal to (x) the BA Rate (as defined in the Credit
Agreement), plus a margin ranging between 1.75% to 2.25% or (y)
the Canadian Base Rate (as defined in the Credit Agreement)
with a 1.75% per annum floor, plus a margin ranging between
0.75% to 1.25%.
at a rate per annum equal to the EURIBOR Rate (as defined in
the Credit Agreement), plus a margin ranging between 1.75% to
2.25% per annum. The Revolving Facility (if funded in Canadian
dollars) will bear interest, at Spectrums option, at a rate per
annum equal to (x) the BA Rate (as defined in the Credit
Agreement), plus a margin ranging between 1.75% to 2.25% or (y)
the Canadian Base Rate (as defined in the Credit Agreement)
with a 1.75% per annum floor, plus a margin ranging between
0.75% to 1.25%.
The margin in each of the foregoing is determined based on
certain total net leverage ratios specified in the Credit
Agreement.
certain total net leverage ratios specified in the Credit
Agreement.
Maturity.
The Term Loan Facilities will mature on June 23, 2022 (the
seventh anniversary of June 23, 2015). The Revolving Facility
will mature on March 6, 2022.
seventh anniversary of June 23, 2015). The Revolving Facility
will mature on March 6, 2022.
Prepayment Provisions.
Subject to certain exceptions, the Credit Agreement requires
mandatory prepayments, in amounts equal to: (i) 50% (reduced to
25% and 0% upon the achievement of certain specified First Lien
Leverage Ratio) of excess cash flow (as defined in the Credit
Agreement), at the end of each fiscal year, (ii) 100% of the
net cash proceeds from certain asset sales by Spectrum Brands
or any of its restricted subsidiaries and certain casualty and
condemnation events (subject to certain exceptions and
reinvestment rights) and (iii) 100% of the net cash proceeds
from the issuance or incurrence after June 23, 2015 of any
additional debt by Spectrum Brands or any of its restricted
subsidiaries excluding debt permitted under the Credit
Agreement except for permitted refinancing indebtedness.
mandatory prepayments, in amounts equal to: (i) 50% (reduced to
25% and 0% upon the achievement of certain specified First Lien
Leverage Ratio) of excess cash flow (as defined in the Credit
Agreement), at the end of each fiscal year, (ii) 100% of the
net cash proceeds from certain asset sales by Spectrum Brands
or any of its restricted subsidiaries and certain casualty and
condemnation events (subject to certain exceptions and
reinvestment rights) and (iii) 100% of the net cash proceeds
from the issuance or incurrence after June 23, 2015 of any
additional debt by Spectrum Brands or any of its restricted
subsidiaries excluding debt permitted under the Credit
Agreement except for permitted refinancing indebtedness.
Voluntary prepayments of borrowings under the Credit Agreement
are permitted at any time, in agreed-upon minimum principal
amounts. Prepayments are not subject to premium or penalty
(except customary LIBOR breakage costs, if applicable).
are permitted at any time, in agreed-upon minimum principal
amounts. Prepayments are not subject to premium or penalty
(except customary LIBOR breakage costs, if applicable).
Guarantees and Security.
Obligations under the Credit Agreement and, at Spectrum Brands
option, under certain interest rate protection or other hedging
arrangements and certain cash management arrangements
(collectively, the Secured Obligations) are guaranteed
by SB/RH Holdings and the direct and indirect wholly-owned
material domestic subsidiaries of SB/RH Holdings, other than
Spectrum Brands (the Subsidiary Guarantors), subject to
certain exceptions, to the Loan Guaranty, dated as of June 23,
2015, by and among SB/RH Holdings, the Subsidiary Guarantors
party thereto from time to time and Deutsche Bank AG New York
Branch, as administrative agent and collateral agent (the
Loan Guaranty).
option, under certain interest rate protection or other hedging
arrangements and certain cash management arrangements
(collectively, the Secured Obligations) are guaranteed
by SB/RH Holdings and the direct and indirect wholly-owned
material domestic subsidiaries of SB/RH Holdings, other than
Spectrum Brands (the Subsidiary Guarantors), subject to
certain exceptions, to the Loan Guaranty, dated as of June 23,
2015, by and among SB/RH Holdings, the Subsidiary Guarantors
party thereto from time to time and Deutsche Bank AG New York
Branch, as administrative agent and collateral agent (the
Loan Guaranty).
The Secured Obligations are secured by first-priority liens on
substantially all of the assets of Spectrum Brands and the
Subsidiary Guarantors and on the equity interests of Spectrum
Brands directly held by SB/RH Holdings to the Security
Agreement, dated as of June 23, 2015, by and among Spectrum
Brands, SB/RH Holdings, the Subsidiary Guarantors party thereto
from time to time and Deutsche Bank AG New York Branch, as
collateral agent (the Security Agreement).
substantially all of the assets of Spectrum Brands and the
Subsidiary Guarantors and on the equity interests of Spectrum
Brands directly held by SB/RH Holdings to the Security
Agreement, dated as of June 23, 2015, by and among Spectrum
Brands, SB/RH Holdings, the Subsidiary Guarantors party thereto
from time to time and Deutsche Bank AG New York Branch, as
collateral agent (the Security Agreement).
Other.
The Credit Agreement contains customary affirmative and
negative covenants, including, but not limited to, restrictions
on Spectrum Brands and its restricted subsidiaries ability to
incur indebtedness, create liens, make investments, pay
dividends or make certain other distributions, and merge or
consolidate or sell assets, in each case subject to certain
exceptions set forth in the Credit Agreement.
negative covenants, including, but not limited to, restrictions
on Spectrum Brands and its restricted subsidiaries ability to
incur indebtedness, create liens, make investments, pay
dividends or make certain other distributions, and merge or
consolidate or sell assets, in each case subject to certain
exceptions set forth in the Credit Agreement.
The foregoing summary is not complete and is qualified entirely
by reference to the full text of the applicable documents. The
Credit Agreement, the Amendments, the Loan Guaranty and the
Security Agreement are each incorporated by reference herein as
exhibits to this report.
by reference to the full text of the applicable documents. The
Credit Agreement, the Amendments, the Loan Guaranty and the
Security Agreement are each incorporated by reference herein as
exhibits to this report.
| 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 incorporated by
reference into this Item 2.03.
reference into this Item 2.03.
| Item 7.01. | Regulation FD Disclosure. |
On March 6, 2017, the Company issued a press release announcing
the Second Amendment, which is attached hereto as Exhibit 99.1.
the Second Amendment, which is attached hereto as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are being filed with this Current Report
on Form 8-K.
on Form 8-K.
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Exhibit No.
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Description
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10.1
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Credit Agreement dated as of June 23, 2015, by and among Spectrum Brands, Inc., SB/RH Holdings, LLC, Deutsche Bank AG New York Branch, as administrative agent, and the lenders party thereto from time to time (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by Spectrum Brands Holdings, Inc. (File No. 001-34757) and SB/RH Holdings, LLC (File No. 333-192634-03) on June 23, 2015). |
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10.2
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Security Agreement, dated as of June 23, 2015, by and among Spectrum Brands, Inc., SB/RH Holdings, LLC, the subsidiary guarantors party thereto from time to time and Deutsche Bank AG New York Branch, as collateral agent (incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by Spectrum Brands Holdings, Inc. (File No. 001-34757) and SB/RH Holdings, LLC (File No. 333-192634-03) on June 23, 2015). |
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10.3
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Loan Guaranty, dated as of June 23, 2015, by and among SB/RH Holdings, LLC, the subsidiary guarantors party thereto from time to time and Deutsche Bank AG New York Branch, as administrative agent and collateral agent (incorporated herein by reference to Exhibit 10.3 to the Current Report on Form 8-K filed by Spectrum Brands Holdings, Inc. (File No. 001-34757) and SB/RH Holdings, LLC (File No. 333-192634-03) on June 23, 2015). |
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10.4
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First Amendment dated as of October 6, 2016 (to the Credit Agreement dated as of June 23, 2015), by and among Spectrum Brands, Inc., SB/RH Holdings, LLC, Deutsche Bank AG New York Branch, as administrative agent, and the lenders party thereto. (incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by Spectrum Brands Holdings, Inc. (File No. 001-34757) and SB/RH Holdings, LLC (File No. 333-192634-03) on October 6, 2016). |
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10.5
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Second Amendment dated as of March 6, 2017 (to the Credit Agreement dated as of June 23, 2015), by and among Spectrum Brands, Inc., SB/RH Holdings, LLC, Deutsche Bank AG New York Branch, as administrative agent, and the lenders party thereto. |
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99.1
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Press Release, dated March 6, 2017 |
Cautionary Note Regarding Forward-Looking Statements.
Certain matters discussed herein and other oral and written
statements by representatives of Spectrum Brands and its
affiliates regarding matters such as the expectations of
Spectrum Brands or its affiliates regarding the terms of
Spectrum Brands indebtedness may be forward-looking statements
within the meaning of the Private Securities Litigation Reform
Act of 1995. These statements are identified by words such as
future, anticipate, intend, plan, estimate, believe, expect,
project, forecast, could, would, should, will, may, and similar
expressions of future intent or the negative of such terms.
These statements are subject to a number of risks and
uncertainties that could cause results to differ materially
from those anticipated as of the date of this report.
statements by representatives of Spectrum Brands and its
affiliates regarding matters such as the expectations of
Spectrum Brands or its affiliates regarding the terms of
Spectrum Brands indebtedness may be forward-looking statements
within the meaning of the Private Securities Litigation Reform
Act of 1995. These statements are identified by words such as
future, anticipate, intend, plan, estimate, believe, expect,
project, forecast, could, would, should, will, may, and similar
expressions of future intent or the negative of such terms.
These statements are subject to a number of risks and
uncertainties that could cause results to differ materially
from those anticipated as of the date of this report.
Actual results may differ materially as a result of (1)
Spectrum Brands ability to manage and otherwise comply with its
covenants with respect to its significant outstanding
indebtedness, (2) our ability to finance, complete, integrate,
and to realize synergies from acquisitions, (3) risks related
to changes and developments in external competitive market
factors, such as introduction of new product features or
technological developments, development of new competitors or
competitive brands or competitive promotional activity or
spending, (4) changes in retailer and consumer demand for the
various types of products Spectrum Brands offers, (5)
unfavorable developments in the global capital markets, (6) the
impact of overall economic conditions on consumer spending, (7)
fluctuations in commodities prices, the costs or availability
of raw materials or terms and conditions available from
suppliers, (8) changes in the general economic conditions in
countries and regions where Spectrum Brands does business, such
as stock market prices, interest rates, currency exchange
rates, inflation and consumer spending, (9) risks related to
the United Kingdoms 2016 referendum, which called for its exit
from the European Union, (10) Spectrum Brands ability to
successfully implement manufacturing, distribution and other
cost efficiencies and to continue to benefit from its
cost-cutting initiatives, (11) Spectrum Brands ability to
identify, develop and retain key employees, or (12) unfavorable
weather conditions and various other risks and uncertainties,
including those discussed herein and those set forth in the
filings to the federal securities laws of each of Spectrum
Brands Holdings, Inc. and SB/RH Holdings, LLC, including each
of their most recently filed Annual Reports on Form 10-K or
Quarterly Reports on Form 10-Q.
Spectrum Brands ability to manage and otherwise comply with its
covenants with respect to its significant outstanding
indebtedness, (2) our ability to finance, complete, integrate,
and to realize synergies from acquisitions, (3) risks related
to changes and developments in external competitive market
factors, such as introduction of new product features or
technological developments, development of new competitors or
competitive brands or competitive promotional activity or
spending, (4) changes in retailer and consumer demand for the
various types of products Spectrum Brands offers, (5)
unfavorable developments in the global capital markets, (6) the
impact of overall economic conditions on consumer spending, (7)
fluctuations in commodities prices, the costs or availability
of raw materials or terms and conditions available from
suppliers, (8) changes in the general economic conditions in
countries and regions where Spectrum Brands does business, such
as stock market prices, interest rates, currency exchange
rates, inflation and consumer spending, (9) risks related to
the United Kingdoms 2016 referendum, which called for its exit
from the European Union, (10) Spectrum Brands ability to
successfully implement manufacturing, distribution and other
cost efficiencies and to continue to benefit from its
cost-cutting initiatives, (11) Spectrum Brands ability to
identify, develop and retain key employees, or (12) unfavorable
weather conditions and various other risks and uncertainties,
including those discussed herein and those set forth in the
filings to the federal securities laws of each of Spectrum
Brands Holdings, Inc. and SB/RH Holdings, LLC, including each
of their most recently filed Annual Reports on Form 10-K or
Quarterly Reports on Form 10-Q.
Spectrum Brands also cautions the reader that its estimates of
trends, market share, retail consumption of its products and
reasons for changes in such consumption are based solely on
limited data available to Spectrum Brands and managements
reasonable assumptions about market conditions, and
consequently may be inaccurate, or may not reflect significant
segments of the retail market. Spectrum Brands also cautions
the reader that undue reliance should not be placed on any
forward-looking statements, which speak only as of the date of
this report. Spectrum Brands undertakes no duty or
responsibility to update any of these forward-looking
statements to reflect events or circumstances after the date of
this report or to reflect actual outcomes.
trends, market share, retail consumption of its products and
reasons for changes in such consumption are based solely on
limited data available to Spectrum Brands and managements
reasonable assumptions about market conditions, and
consequently may be inaccurate, or may not reflect significant
segments of the retail market. Spectrum Brands also cautions
the reader that undue reliance should not be placed on any
forward-looking statements, which speak only as of the date of
this report. Spectrum Brands undertakes no duty or
responsibility to update any of these forward-looking
statements to reflect events or circumstances after the date of
this report or to reflect actual outcomes.
About SPECTRUM BRANDS HOLDINGS, INC. (NYSE:SPB)
Spectrum Brands Holdings, Inc. (SB Holdings) is a diversified global consumer products company. The Company manufactures, markets and/or distributes its products in approximately 160 countries in the North America (NA); Europe, the Middle East and Africa (EMEA); Latin America (LATAM), and Asia-Pacific (APAC) regions. It has five segments: Global Batteries & Appliances (GBA), Global Pet Supplies (PET), Home and Garden (H&G), Hardware & Home Improvement (HHI) and Global Auto Care (GAC). The Company’s GBA segment includes product categories, such as consumer batteries, small appliances and personal care. The Company’s HHI segment includes product categories, such as lockset, plumbing and hardware. The Company’s PET segment’s product categories include aquatics, companion animal and pet food. The Company’s H&G segment’s product categories include controls, household and repellents. The Company’s GAC segment’s product categories include appearance, performance and A/C recharge. SPECTRUM BRANDS HOLDINGS, INC. (NYSE:SPB) Recent Trading Information
SPECTRUM BRANDS HOLDINGS, INC. (NYSE:SPB) closed its last trading session down -0.30 at 137.39 with 218,246 shares trading hands.