WABCO HOLDINGS INC. (NYSE:WBC) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement.
On March22, 2018, WABCO Holdings Inc. (the “Company”), as guarantor, and WABCO Europe BVBA, a wholly-owned subsidiary of the Company, as the borrower (the “Borrower”), entered into six Schuldschein loan agreements (collectively, the “Loan Agreements”) in an aggregate amount of €300million. The Loan Agreements are privately placed to institutional investors and arranged by BNP Paribas, acting through its London branch, ING Bank, a branch of ING-DiBa AG, and UniCredit Bank AG. The loans have floating and fixed rate tranches with maturities of three, four and five years. The Company anticipates completing the funding of the transaction on March28, 2018.
The loans constitute a diversification of the Company’s debt portfolio in what we believe to be an attractive Euro interest rate environment.
The loans are senior unsecured obligations of the Borrower. The Company guarantees the loans, and its guarantees are senior unsecured obligations of the Company. As debt obligations of a subsidiary of the Company, the loans constitute priority debt under the Company’s existing revolving credit facilities and privately placed senior notes.
The Borrower will pay interest under the fixed rate tranches annually on March31 of each year, commencing March31, 2019, at fixed annual rates of 0.851%, 1.150%, and 1.428%, respectively. The Borrower will pay interest under the floating rate tranches every 6 months on March31 and September30 of each year, commencing September 30, 2018, at an interest rate based on the 6-month EURIBOR plus a margin of 80 bps, 90bps and 100 bps respectively.
The loans will mature on March31, 2021, March31, 2022 and March31, 2023, respectively, unless earlier prepaid in accordance with their terms. Subject to certain conditions, the Borrower may, at its option, prepay all or any part of any loan in an amount equal to the higher (i)of the outstanding nominal amount of such loan (or the part of it) and (ii)the Discounted Value (as defined in the respective Loan Agreements).
If the Company undergoes a Change in Control (as defined in the Loan Agreements), subject to certain conditions, the Borrower is required to redeem the loans, with accrued interest, at the next interest payment date if the Borrower and the applicable lender have not reached agreement regarding the continuation of the loan within 10 business days of the notification of the Change of Control and the applicable lender makes a written demand for early redemption within the period specified in the Loan Agreements. For fixed rate arrangements, the redemption would be at the same price as for a voluntary prepayment as described above.
The Loan Agreements contain customary affirmative and negative covenants, including, among others, limitations on transactions with affiliates, mergers and consolidations, priority indebtedness, liens and dispositions. The Loan Agreements also include financial covenants generally consistent with the financial covenants contained in the Company’s existing revolving credit facilities and senior notes. This includes a covenant that the Company maintain (i)a ratio of Consolidated Net Indebtedness (as defined in the Loan Agreements) on the last day of each fiscal quarter to Consolidated EBITDA (as defined in the Loan Agreements) for the period of twelve consecutive months ending on such day of not more than 3.0 to 1 and (ii)a ratio of Consolidated EBITDA to Consolidated Net Interest Expense (as defined in the Loan Agreements) for the period of twelve consecutive months ending on the last day of each fiscal quarter of not less than 3.0 to 1. The Loan Agreements also contain a negative covenant limiting the amount of Indebtedness (as defined in the Loan Agreements) that may be incurred by subsidiaries of the Company to $500million (subject to certain exceptions as set forth in the Loan Agreements), of which not more than $150million may be secured.
The Loan Agreements provide for customary events of default, including, among others, payment defaults, breach of representations and warranties, failure to perform covenants, cross-default to other material liabilities in certain circumstances, and bankruptcy and other insolvency events. If an event of default under the Loan Agreements occurs, each lender may call its corresponding loan for good cause and demand immediate repayment of such capital plus interest accruing up to the date of repayment and compensation for any damages incurred by termination of the Loan Agreement and early redemption.
The foregoing description of the Loan Agreements is qualified in its entirety by reference to the full text of each of the Loan Agreements, which are attached as Exhibits 10.1, 10.2, 10.3, 10.4, 10.5 and 10.6 hereto, and incorporated herein by reference.
The Loan Agreements have been filed with this Current Report on Form 8-K to provide investors and security holders with information regarding their terms. They are not intended to provide any other factual information about the Company. The representations, warranties and covenants contained in the Loan Agreements were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures exchanged between the parties in connection with the execution of the Loan Agreements.
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 in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 1.01.
Item 1.01. Financial Statements and Exhibits.
The following exhibits are furnished as part of this Current Report on Form 8-K to the extent described in Item 1.01.
Description of Document
|10.1||Promissory Loan Agreement in the principal amount of € 10million, dated March22, 2018, among WABCO Europe BVBA, UniCredit Bank AG, and WABCO Holdings Inc.|
|10.2||Promissory Loan Agreement in the principal amount of € 40million, dated March22, 2018, among WABCO Europe BVBA, UniCredit Bank AG, and WABCO Holdings Inc.|
|10.3||Promissory Loan Agreement in the principal amount of € 50million, dated March22, 2018, among WABCO Europe BVBA, UniCredit Bank AG, and WABCO Holdings Inc.|
|10.4||Promissory Loan Agreement in the principal amount of € 60million, dated March22, 2018, among WABCO Europe BVBA, UniCredit Bank AG, and WABCO Holdings Inc.|
|10.5||Promissory Loan Agreement in the principal amount of € 60million, dated March22, 2018, among WABCO Europe BVBA, UniCredit Bank AG, and WABCO Holdings Inc.|
|10.6||Promissory Loan Agreement in the principal amount of € 80million, dated March22, 2018, among WABCO Europe BVBA, UniCredit Bank AG, and WABCO Holdings Inc.|
WABCO Holdings Inc. ExhibitEX-10.1 2 d331804dex101.htm EX-10.1 EX-10.1 Exhibit 10.1 WABCO Europe BVBA EUR 10,…To view the full exhibit click
About WABCO HOLDINGS INC. (NYSE:WBC)
WABCO Holdings Inc. is a supplier of electronic, mechanical, electro-mechanical and aerodynamic products for various manufacturers. The Company engineers, develops, manufactures and sells systems controlling braking, stability, suspension, transmission automation, as well transmission automation and air management systems for commercial vehicles. It sells its products to truck and bus original equipment manufacturers (OEMs); commercial vehicle aftermarket distributors for replacement parts and services and commercial vehicle fleet operators for management solutions and service; trailer OEMs, and car manufacturers. For passenger cars, including sports utility vehicles (SUVs), the Company supplies products for niche applications. The Company’s products include anti-lock braking systems (ABS), electronic braking systems (EBS), electronic stability control (ESC), brake controls, automated manual transmission systems, air disc brakes and a range of conventional mechanical products.