VULCAN MATERIALS COMPANY (NASDAQ:VMC) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
| Entry into a Material Definitive Agreement. |
On December 21, 2016, Vulcan Materials Company (Vulcan, we, our,
or us) entered into a new credit agreement (the Credit Agreement)
that provides a five-year $750 million unsecured revolving credit
facility and a five-year $250 million unsecured delayed draw term
loan facility (the Credit Facilities).The Credit Facilities are
guaranteed by our significant subsidiaries. Proceeds of the
Credit Facilities will be used for general corporate purposes.
The Credit Agreement contains affirmative, negative, and
financial covenants and events of default customary for
investment-grade credit facilities. The primary negative covenant
limits our ability to incur secured debt. The financial covenants
are: (1) a maximum debt to EBITDA ratio of 3.50:1.00 (with a
permitted step-up to 3.75:1.00 for three (3) fiscal quarters
ending after the consummation of certain material acquisitions),
and (2) a minimum EBITDA to interest expense ratio of 3.00:1.00.
Loans under the Credit Facilities bear interest at a rate equal
to the Eurodollar Rate (LIBOR, adjusted for any reserves for
Eurocurrency liabilities), or the Base Rate (which is defined as
the highest of the SunTrust prime rate, the Federal funds rate
plus 0.50% and the one-month Eurodollar Rate plus 1.00%) plus a
credit spread based on our credit ratings (which is different for
Eurodollar Rate loans and Base Rate loans).
SunTrust Bank serves as administrative agent and the lenders (the
Lenders) under the Credit Agreement are:
SunTrust Bank
Wells Fargo Bank, National Association
U.S. Bank National Association
Bank of America, N.A.
Regions Bank
Goldman Sachs Bank USA
The Northern Trust Company
First Tennessee Bank National Association
Synovus Bank
Atlantic Capital Bank
Certain of the Lenders and their affiliates have provided from
time to time, and may continue to provide, investment banking,
commercial banking, financial and other services to us for which
we have paid, and intend to pay, customary fees. Additionally,
our pension fund invests in funds managed by certain of the
Lenders or affiliates of the Lenders.
The foregoing description of the Credit Facilities is qualified
in its entirety by reference to the full text of the Credit
Agreement, which is filed as Exhibit 10.1 to this Current Report
on Form 8-K and is incorporated herein by reference.
The Credit Agreement has been included to provide shareholders
with information regarding its terms. The inclusion of such
document is not intended to provide any other factual information
about Vulcan or our subsidiaries or affiliates. The
representations, warranties and covenants contained in the Credit
Agreement were made solely for purposes of such document and as
of specific dates, were solely for the benefit of the parties to
the Credit Agreement, may be subject to limitations agreed upon
by the contracting parties, including being qualified by
confidentiality disclosures made for the purposes of allocating
contractual risk between the parties to the Credit Agreement
instead of establishing these matters as facts, and may be
subject to standards of materiality applicable to the contracting
parties that differ from those applicable to shareholders.
Shareholders are not third-party beneficiaries under the Credit
Agreement and should not rely on the representations, warranties
and covenants or any descriptions thereof as characterizations of
the actual state of facts or condition of Vulcan or any of our
subsidiaries or affiliates. Moreover, information concerning the
subject matter of the representations and warranties may change
after the date of the Credit Agreement, which subsequent
information may or may not be fully reflected in Vulcans public
disclosures.
| Item 1.02 |
Termination of a Material Definitive Agreement. |
On December 21, 2016, Vulcan terminated the credit agreement
dated June 19, 2015 among Vulcan, SunTrust Bank, as
administrative agent, and the several banks from time to time
parties thereto as lenders (the 2015 Credit Agreement). The 2015
Credit Agreement provided a five-year $750 million unsecured
revolving credit facility that was guaranteed by Vulcans
significant subsidiaries. Certain of the lenders under the 2015
Credit Agreement and their affiliates have provided from time to
time, and may continue to provide, investment banking, commercial
banking, financial and other services to us for which we have
paid, and intend to pay, customary fees. Additionally, our
pension fund invests in funds managed by certain of the lenders
or affiliates of the lenders. No early termination penalty was
incurred by Vulcan in connection with the termination. The 2015
Credit Agreement was terminated in anticipation of Vulcan
entering into the Credit Agreement as described in Item 1.01 of
this Current Report on Form 8-K.
| Item 2.03 |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information contained in Item 1.01 of this Current Report on
Form 8-K is incorporated by reference into this Item 2.03.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit No. | Description | |
| 10.1 |
Credit Agreement dated December 21, 2016 among Vulcan Materials Company, and SunTrust Bank, as Administrative Agent, and the Lenders and other parties named therein. |
About VULCAN MATERIALS COMPANY (NASDAQ:VMC)