TEREX CORPORATION (NYSE:TEX) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01.
Entry Into a Material Definitive Agreement.
Senior Secured Credit Facility
Terex Corporation and certain of its subsidiaries (collectively,
Terex or the Company) entered into a Credit Agreement (the New
Credit Agreement) dated as of January 31, 2017, with the lenders
and issuing banks party thereto (the New Lenders) and Credit
Suisse AG, Cayman Islands Branch (CSAG), as administrative agent
and collateral agent. The joint bookrunners for the New Credit
Agreement were Credit Suisse Securities (USA) LLC, Barclays Bank
PLC, Commerzbank Aktiengesellschaft, Credit Agricole Corporate
and Investment Bank, Deutsche Bank Securities Inc., HSBC
Securities (USA) Inc. and Morgan Stanley Senior Funding, Inc.
The New Credit Agreement provides Terex with a senior secured
revolving line of credit of up to $450 million that is available
through January 31, 2022 and a $400 million senior secured term
loan, which will mature on January 31, 2024. The New Credit
Agreement allows unlimited incremental commitments, which may be
extended at the option of the existing or new lenders and can be
in the form of revolving credit commitments, term loan
commitments, or a combination of both, with incremental amounts
in excess of $300 million available as long as the Company
satisfies a senior secured leverage ratio contained in the New
Credit Agreement.
The New Credit Agreement requires the Company to comply with a
number of covenants. The covenants limit, in certain
circumstances, the Companys ability to take a variety of actions,
including but not limited to: incur indebtedness; create or
maintain liens on its property or assets; make investments, loans
and advances; repurchase shares of its Common Stock; engage in
acquisitions, mergers, consolidations and asset sales; redeem
debt; and pay dividends and distributions. If the Companys
borrowings under its revolving line of credit are greater than
30% of the total revolving credit commitments, the New Credit
Agreement requires the Company to comply with certain financial
tests as set forth in the New Credit Agreement. If applicable,
the minimum required levels of the interest coverage ratio would
be 2.50 to 1.00 and the maximum permitted levels of the senior
secured leverage ratio would be 2.75 to 1.00. The New Credit
Agreement also contains customary default provisions.
Furthermore, the Company and certain of its subsidiaries agreed
to take certain actions to secure borrowings under the New Credit
Agreement. As a result, on January 31, 2017, Terex and certain of
its subsidiaries entered into a Guarantee and Collateral
Agreement with CSAG, as collateral agent for the New Lenders,
granting security and guarantees to the New Lenders for amounts
borrowed under the New Credit Agreement. to the Guarantee and
Collateral Agreement, Terex is required to (a) pledge as
collateral the capital stock of certain of the Companys material
domestic subsidiaries and 65% of the capital stock of certain of
the Companys material foreign subsidiaries, and (b) provide a
first priority security interest in substantially all of the
Companys domestic assets.
CSAG, or its affiliates, and certain New Lenders, or their
affiliates, are party to other agreements with the Company and
its subsidiaries, including the provision of commercial banking,
investment banking, trustee and/or other financial services in
the ordinary course of business of the Company and its
subsidiaries.
The foregoing summary is qualified in its entirety by reference
to the New Credit Agreement, a copy of which is attached hereto
and incorporated by reference herein as Exhibit 10.1 to this
Current Report on Form 8-K, and to the Guarantee and Collateral
Agreement, a copy of which is attached hereto and incorporated by
reference herein as Exhibit 10.2 to this Current Report on Form
8-K. A copy of a press release announcing the Companys entry into
the New Credit Agreement is included as Exhibit 99.1 to this Form
8-K and is hereby incorporated by reference into this Form 8-K.
5.625% Senior Notes due 2025
On January 31, 2017, Terex completed a private offering of $600
million aggregate principal amount of its 5.625% Senior Notes due
2025 (the Senior Notes) that is exempt from the registration
requirements of the Securities Act of 1933, as amended. In
connection with the offering, the Company entered into a new
indenture, as described in the following paragraphs.
The Senior Notes were issued to an indenture dated as of January
31, 2017 (the Indenture), among the Company, HSBC Bank USA,
National Association, as trustee (the Trustee), and the
guarantors named therein (the Guarantors). The Senior Notes will
be fully and unconditionally guaranteed, jointly and severally,
on a senior unsecured basis by certain of the Companys existing
and future wholly-owned domestic subsidiaries. A copy of the
Indenture is set forth as Exhibit 4.1 to this Current Report on
Form 8-K, and is incorporated herein by reference. The
descriptions of the Indenture and the Senior Notes (a form of
which is attached as an exhibit to the Indenture) in this report
are only summaries and are qualified in their entirety by
reference to the actual terms of the Indenture and the Senior
Notes, respectively.
The Indenture and the Senior Notes provide, among other things,
that the Senior Notes will be the Companys senior unsecured
obligations and will rank equally in right of payment with
certain of the Companys senior unsecured indebtedness. The Senior
Notes will bear interest from January 31, 2017 at an annual rate
of 5.625%, payable semi-annually on each February 1 and August 1
during which the Senior Notes are outstanding, commencing on
August 1, 2017. The Senior Notes will mature on February 1, 2025.
The Company may redeem the Senior Notes in whole or in part, on
or after February 1, 2020, at the redemption prices set forth in
the Indenture. Prior to February 1, 2020, the Company may redeem
the Senior Notes, in whole or in part, at a price equal to 50% of
the principal amount thereof plus a make-whole premium set forth
in the Indenture. In addition, prior to February 1, 2020, the
Company may redeem up to 40% of the Senior Notes from the
proceeds of certain equity offerings. Upon certain change of
control events (as defined in the Indenture), the holders of the
Senior Notes may require the Company to repurchase all or a
portion of the Senior Notes at a purchase price of 101% of their
principal amount plus accrued and unpaid interest, if any, to the
date of purchase.
The terms of the Indenture, among other things, limit the ability
of the Company and its restricted subsidiaries to (i) incur
additional indebtedness, (ii) issue preferred stock, (iii) create
or incur certain liens, (iv) pay dividends and make other
restricted payments, (v) create restrictions on dividend and
other payments to the Company from certain of its subsidiaries,
(vi) sell assets and subsidiary stock, (vii) engage in certain
transactions with affiliates, (viii) consolidate, merge or
transfer all or substantially all of the Companys assets and the
assets of its subsidiaries, (ix) enter into certain
sale/leaseback transactions and (x) create unrestricted
subsidiaries. These covenants are subject to a number of
important exceptions and qualifications. The Indenture provides
for customary events of default which include, among other
things, (subject in certain cases to customary grace and cure
periods) defaults based on: (i) the failure to make payments
under the Indenture when due, (ii) breach of covenants, (iii)
acceleration of other material indebtedness, (iv) bankruptcy
events and (v) material judgments. Generally, if an event of
default occurs, the trustee or the holders of at least 25% in
principal amount of the then outstanding Senior Notes may declare
all of the Senior Notes to be due and payable.
The Trustee and its affiliates maintain relationships in the
ordinary course of business with the Company and its
subsidiaries, including the provision of commercial banking,
investment banking, trustee and/or other financial services.
A copy of the press release announcing that the Company has
completed its offering of the Senior Notes is included as Exhibit
99.1 and is hereby incorporated by reference into this Form 8-K.
Item 1.02.
Termination of a Material Definitive Agreement.
On January 31, 2017, in connection with the New Lenders funding
under the New Credit Agreement and the Companys entry into the
Guarantee and Collateral Agreement, the Company terminated (i)
its existing credit agreement, dated as of August 13, 2014, as
amended (the Old Credit Agreement), among Terex, certain of its
subsidiaries, the lenders thereunder and Credit Suisse AG, as
administrative agent and collateral agent, (ii) its existing
guarantee and collateral agreement, dated as of August 13, 2014,
among Terex, certain of its subsidiaries, and Credit Suisse AG,
as collateral agent (the Old Guarantee Agreement), and (iii)
agreements and documents related to (i) and (ii).
Under the Old Credit Agreement, the Company maintained a senior
secured revolving line of credit of up to $600 million that was
available through August 2019. The Old Credit Agreement also
included provisions for senior secured term borrowings in dollars
and Euro, with principal balances of $224.8 million and 195.5
million, respectively, that were set to mature in August 2021.
Terex and certain of its domestic subsidiaries provided security
and guarantees to the lenders under the Old Guarantee Agreement,
which were released in connection with the execution of the New
Credit Agreement.
Certain lenders, or their affiliates, under the Old Credit
Agreement are party to other agreements with the Company and its
subsidiaries, including the New Credit Agreement and the
provision of commercial banking, investment banking, trustee
and/or other financial services in the ordinary course of
business of the Company and its subsidiaries.
Item 2.03.
Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
The information provided in Item 1.01 of this Current Report on
Form 8-K is hereby incorporated by reference into this Item 2.03.
Item 8.01.
Other Events.
On January 31, 2017, Terex issued a press release announcing the
initial results of its tender offer for its 6.00% senior notes
due 2021 (the 2021 Notes). to the terms of the tender offer,
Terexs offer to pay an early tender payment in addition to the
tender offer consideration expired at 5:00 p.m., New York City
time, on January 30, 2017 (the Early Tender Deadline). Based on
final information provided to Terex by Global Bondholder
Services, the tender agent and information agent for the 2021
Notes, approximately $377,450,000 in aggregate principal amount
of the 2021 Notes were validly tendered (and not validly
withdrawn) at or prior to the Early Tender Deadline. Terex will
accept the 2021 Notes validly tendered (and not validly
withdrawn) at or prior to the Early Tender Deadline on January
31, 2017 (the Initial Settlement Date). Holders of the 2021 Notes
who validly tendered (and did not validly withdraw) their 2021
Notes will receive $1,031.25 per $1,000 principal amount of their
2021 Notes on the Initial Settlement Date. A copy of the press
release is included as Exhibit 99.1 and is hereby incorporated by
reference into this Form 8-K.
Holders of the 2021 Notes who validly tender (and do not validly
withdraw) their 2021 Notes after the Early Tender Deadline and at
or prior to 11:59 p.m., New York City time, on February 13, 2017,
unless extended or earlier terminated by Terex in its sole
discretion (the Expiration Time), will be eligible to receive
$1,021.25 per $1,000 principal amount of their 2021 Notes on the
Final Settlement Date, which will occur promptly following the
Expiration Time and is expected to be February 14, 2017 (the
Final Settlement Date).
Holders of the 2021 Notes will also receive accrued and unpaid
interest from the last interest payment date on their 2021 Notes
up to, but not including, the applicable settlement date for all
of their 2021 Notes that Terex accepts for purchase.
to a previously announced notice of redemption, Terex will redeem
any and all of the 2021 Notes that remain outstanding after the
Final Settlement Date on February 15, 2017 at a redemption price
of 103.000%, plus accrued and unpaid interest.
Item 9.01.
Financial Statements and Exhibits.
(d)Exhibits
|
Exhibit No. |
Description |
|
|
4.1 |
Indenture, dated as of January 31, 2017, among Terex |
|
|
10.1 |
Credit Agreement dated as of January 31, 2017, among Terex |
|
|
10.2 |
Guarantee and Collateral Agreement dated as of January 31, |
|
|
99.1 |
Press Release of Terex Corporation issued on January 31, |
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About TEREX CORPORATION (NYSE:TEX)
Terex Corporation is a manufacturer of lifting and material processing products and services that deliver lifecycle solutions. The Company has three business segments: Aerial Work Platforms (AWP), Cranes and Materials Processing (MP). It delivers lifecycle solutions to a range of industries, including the construction, infrastructure, manufacturing, shipping, utility, quarrying and mining industries. The AWP segment designs, manufactures, services and markets aerial work platform equipment, telehandlers and light towers. The AWP segment’s products are used by its customers to construct and maintain industrial, commercial and residential buildings and facilities, and for other commercial operations, as well as in a range of infrastructure projects. The Cranes segment’s products are used by its customers for construction and manufacturing facilities, among others. The MP segment’s products are used by its customers in construction, infrastructure and recycling projects. TEREX CORPORATION (NYSE:TEX) Recent Trading Information
TEREX CORPORATION (NYSE:TEX) closed its last trading session down -0.37 at 31.72 with 1,341,814 shares trading hands.