WATTS WATER TECHNOLOGIES,INC. (NYSE:WTS) Files An 8-K Entry into a Material Definitive Agreement
Item1.01 Entry into a Material Definitive Agreement.
On December16, 2016, Watts International Holdings Limited (Watts
International), a wholly owned subsidiary of Watts Water
Technologies,Inc. (the Registrant), entered into a Facility
Agreement (the Facility Agreement) among Watts International, as
original borrower and original guarantor, Watts Water
Technologies EMEA B.V., a wholly owned subsidiary of the
Registrant (Watts EMEA), as original guarantor, JPMorgan Chase
Bank, N.A., as sole bookrunner and sole lead arranger (JP Morgan
Chase Bank), J.P. Morgan Europe Limited, as agent to the
financial parties, and the other lenders referred to therein, a
copy of which is attached hereto as Exhibit10.1 and incorporated
herein by reference. The following is a summary of the material
terms and conditions of the Facility Agreement and is qualified
in its entirety by reference to the Facility Agreement.
The Facility Agreement provides for a 110 million, 364 day, term
loan facility available to the Company in a single draw. On
December20, 2016, Watts International borrowed the full amount
available for borrowing under the Facility Agreement (the Closing
Date). The loan made on the Closing Date under the Facility
Agreement bears interest at a rate per annum equal to (i)the Euro
InterBank Offered Rate (EURIBOR), provided that if such rate is
less than zero, then EURIBOR shall be deemed to be zero, plus
(ii)a margin of 1.875%, provided that if no event of default is
continuing and Watts Internationals consolidated leverage ratio
is at a specified level, the margin shall decrease to 1.50%.
Accrued interest on the loan is payable on the last day of each
interest period. The first interest period is set at one month
and may be changed subsequently to a period of one, two, or three
months (or such other period agreed with all the lenders). The
loan under the Facility Agreement is required to be repaid on the
following schedule: 15,000,000 on June30, 2017; 15,000,000 on
September29, 2017; and the remaining balance on December19, 2017.
Watts Internationals obligations under the Facility Agreement are
guaranteed by Watts EMEA with a cross guarantee from Watts
International. The Facility Agreement matures on December19,
2017, subject to the terms of the Facility Agreement. Watts
International may prepay all or a portion of the loan outstanding
under the Facility Agreement from time to time (subject to
prepaying a minimum amount) without premium or penalty, other
than customary breakage costs, if any, and subject to the terms
of the Facility Agreement. Once repaid, amounts borrowed under
the Facility Agreement may not be borrowed again. If the
Registrant ceases to control Watts International, the lenders may
cancel their commitments and declare the loan immediately due and
payable.
The Facility Agreement imposes various restrictions on Watts
International and its subsidiaries, including restrictions
pertaining to: (i)the incurrence of additional indebtedness,
(ii)limitations on liens, (iii)making distributions, dividends
and other payments, (iv)mergers, consolidations and acquisitions,
(v)dispositions of assets, and (vi)the requirement to meet a
certain consolidated leverage ratio and a certain consolidated
cash to debt ratio.
The Facility Agreement contains usual and customary events of
default for transactions of this type. If an event of default
occurs and is continuing, the lenders have the right to
accelerate and to cancel the commitments and declare that all
amounts outstanding under the Facility Agreement be immediately
due and payable.
Substantially all of the proceeds of the borrowings made on the
Closing Date under the Facility Agreement were used to prepay
$113 million of loan principle outstanding under that certain
Credit Agreement, dated February12, 2016 (the 2016 Credit
Agreement), among the Registrant, certain subsidiaries of the
Registrant as borrowers, JPMorgan Chase Bank as administrative
agent, swing line lender and letter of credit issuer, and the
other lenders referred to therein. As of December20, 2016, the
Registrant has used $300 million of credit under the term loan
facility provided by the 2016 Credit Agreement (the Term Loan
Facility) and an additional $162 million of credit under the
revolving credit facility provided by the 2016 Credit Agreement
(the Revolving Credit Facility). The Registrant has an additional
$25 million of stand-by letters of credit outstanding under the
2016 Credit Agreement. As December20, 2016, the Registrant has
borrowed the full amount of the Term Loan Facility, and $313
million of the Revolving Credit Facility remains unused and
potentially available, subject to the terms and conditions of the
2016 Credit Agreement. The Revolving Credit Facility may be
increased by an additional $500 million under certain
circumstances and subject to the terms of the 2016 Credit
Agreement. A copy of the 2016 Credit Agreement is provided as
Exhibit10.1 to the Registrants Current Report on Form8-K, filed
with the Securities and Exchange Commission on February16, 2016.
Item2.03 Creation of a Direct
Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant.
The information included in Item1.01 is incorporated herein by
reference.
Item9.01 Financial Statements and Exhibits.
(d) Exhibits.
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ExhibitNumber |
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Description |
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10.1 |
Facility Agreement, dated as of December16, 2016, among |
About WATTS WATER TECHNOLOGIES, INC. (NYSE:WTS)
Watts Water Technologies, Inc. (Watts) is a supplier of products and solutions that manage and conserve the flow of fluids and energy into, through and out of buildings in the residential and commercial markets. The Company, through its subsidiary, Watts Regulator Co., is engaged in manufacturing products and systems focused on the control, conservation and quality of water, and safety of the people using it. The Company’s operating segments include Americas, EMEA and Asia-Pacific. The Company distributes its products through primary distribution channels, including wholesale, original equipment manufacturers (OEMs) and do-it-yourself (DIY). The Company offers a range of products in terms of design distinction, size and configuration. It offers products in four product lines, including residential and commercial flow control products; heating, ventilation and air conditioning (HVAC) and gas products; drainage and water re-use products, and water quality products. WATTS WATER TECHNOLOGIES, INC. (NYSE:WTS) Recent Trading Information
WATTS WATER TECHNOLOGIES, INC. (NYSE:WTS) closed its last trading session up +0.09 at 66.34 with 71,961 shares trading hands.