STEPAN COMPANY (NYSE:SCL) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement.
On January30, 2018, Stepan Company (“Stepan”) entered into a Credit Agreement among Stepan, the foreign subsidiary borrowers from time to time party thereto, the lenders party thereto, JP Morgan Chase Bank, N.A., as administrative agent, Bank of America, N.A., as syndication agent, and J.P. Morgan Chase Bank, N.A. and Merrill Lynch Pierce Fenner& Smith Incorporated, as joint lead arrangers and joint bookrunners (the “Credit Agreement”). The Credit Agreement provides for a $350.0million multi-currency revolving credit facility, which matures on January30, 2023. Under this five-year committed facility, Stepan may draw as needed to finance working capital needs, permitted acquisitions and capital expenditures and for general corporate purposes. This new facility replaces Stepan’s $125.0million multi-currency revolving credit agreement dated as of July10, 2014.
Loans under the Credit Agreement may be incurred, at the discretion of Stepan, with terms to maturity of up to six months. Stepan may choose from two interest rate options: (1)LIBOR applicable to each currency plus spreads ranging from 1.25percent to 1.875percent, depending on Stepan’s net leverage ratio, or (2)the prime rate plus 0.25percent to 0.875percent, depending on Stepan’s net leverage ratio. The Credit Agreement requires Stepan to pay a commitment fee ranging from 0.15percent to 0.325percent per annum, which also depends on Stepan’s net leverage ratio. The Credit Agreement requires the maintenance of certain interest coverage and leverage financial ratios and compliance with certain other covenants, including limitations on restricted payments, indebtedness and liens. The Credit Agreement includes customary events of default, including failure to pay principal or interest when due, failure to comply with the financial and operational covenants, non-compliance with the other loan documents, the occurrence of a change of control event, and bankruptcy and other insolvency events.
The Company is a party to (i)a Note Purchase Agreement dated as of September29, 2005 (as amended, the “2005 NPA”), to which the Company has issued (a) $40,000,000 in aggregate principal amount of its 5.69% Series 2005-A Senior Notes due November1, 2018, (b) $40,000,000 in aggregate principal amount of its 5.88% Series 2010-A Senior Notes due June1, 2022, and (c) $65,000,000 in aggregate principal amount of its 4.86% Series 2011-A Senior Notes due November1, 2023, (ii) a Note Purchase Agreement dated as of June27, 2013 (the “2013 NPA”), to which the Company has issued $100,000,000 in aggregate principal amount of its 3.86% Senior Notes due June27, 2025, and (iii)a Note Purchase Agreement dated as of July10, 2015 (the “2015 NPA”), to which the Company has issued $100,000,000 in aggregate principal amount of its 3.95% Senior Notes due July10, 2027.
The Company has entered into amendments to the 2005 NPA, the 2013 NPA and the 2015 NPA dated as of January30, 2018 (together, the “2018 NPA Amendments”) to replace the existing financial covenants contained therein with a maximum net leverage ratio covenant and an interest coverage ratio covenant on substantially the same terms as the corresponding covenants contained in the Credit Agreement, conform certain defined terms used in connection with such financial covenants with the definitions contained in the Credit Agreement and eliminate the concept of restricted and unrestricted subsidiaries.
The foregoing descriptions of the Credit Agreement and the 2018 NPA Amendments are qualified in their entirety by reference to the Credit Agreement and each of the 2018 NPA Amendments, copies of which are attached as Exhibits 10.1, 10.2, 10.3 and 10.4 hereto and incorporated herein by reference.
Item 1.01 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 1.01 Financial Statements and Exhibits.
(d) Exhibits
|
Exhibit Number |
Description |
| 10.1 | Credit Agreement, dated as of January30, 2018, among Stepan Company, the foreign subsidiary borrowers from time to time party thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent, Bank of America, N.A., as syndication agent, and J.P. Morgan Chase Bank, N.A. and Merrill Lynch Pierce Fenner& Smith Incorporated, as joint lead arrangers and joint bookrunners. |
| 10.2 | Third Amendment, dated as of January30, 2018, to the Note Purchase Agreement dated as of September29, 2005 among Stepan Company and the noteholders party thereto. |
| 10.3 | First Amendment, dated as of January30, 2018, to the Note Purchase Agreement dated as of June27, 2013 among Stepan Company and the noteholders party thereto. |
| 10.4 | First Amendment, dated as of January30, 2018, to the Note Purchase Agreement dated as of July10, 2015 among Stepan Company and the noteholders party thereto. |
EXHIBIT INDEX
|
Exhibit Number |
Description |
| 10.1 | Credit Agreement, dated as of January 30, 2018, among Stepan Company, the foreign subsidiary borrowers from time to time party thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent, Bank of America, N.A., as syndication agent, and J.P. Morgan Chase Bank, N.A. and Merrill Lynch Pierce Fenner& Smith Incorporated, as joint lead arrangers and joint bookrunners. |
| 10.2 | Third Amendment, dated as of January30, 2018, to the Note Purchase Agreement dated as of September29, 2005 among Stepan Company and the noteholders party thereto. |
| 10.3 | First Amendment, dated as of January30, 2018, to the Note Purchase Agreement dated as of June27, 2013 among Stepan Company and the noteholders party thereto. |
| 10.4 | First Amendment, dated as of January30, 2018, to the Note Purchase Agreement dated as of July10, 2015 among Stepan Company and the noteholders party thereto. |
STEPAN CO ExhibitEX-10.1 2 d508587dex101.htm EX-10.1 EX-10.1 EXHIBIT 10.1 CREDIT AGREEMENT dated as of January 30,…To view the full exhibit click here
About STEPAN COMPANY (NYSE:SCL)
Stepan Company produces specialty and intermediate chemicals, which are sold to other manufacturers and used in a variety of end products. The Company has three segments: Surfactants, Polymers and Specialty Products. The Company’s Surfactants segment offers products, which are principal ingredients in consumer and industrial cleaning products, such as detergents for washing clothes, dishes, carpets, floors and walls, as well as shampoos and body washes. The Company’s Polymers segment includes polyurethane polyols, polyester resins and phthalic anhydride. The Company’s Specialty Products segment includes flavors, emulsifiers and solubilizers used in food, flavoring, nutritional supplement and pharmaceutical applications. Its markets include manufacturers of cleaning and washing compounds, paints, cosmetics, food, beverages, nutritional supplements, agricultural products, plastics, furniture, automotive equipment, insulation and refrigeration.