Willis Lease Finance Corporation (NASDAQ:WLFC) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement
On June 7, 2019, Willis Lease Finance Corporation, (WLFC, or the Borrower) entered into a Fourth Amended and Restated Credit Agreement dated as of June 7, 2019 (the Credit Facility). This $1.0 billion revolving credit facility has an accordion feature up to $1.3 billion and is provided by a syndicate of seventeen banks including: MUFG Bank, Ltd./MUFG Union Bank N.A., as Administrative Agent, Joint Lead Arranger, Joint Bookrunner, and Security Agent; Bank of America, N.A. as Joint Lead Arranger, Joint Bookrunner and Syndication Agent; Wells Fargo Securities, LLC/Wells Fargo Bank, National Association as Joint Lead Arranger, Joint Bookrunner and Documentation Agent; and U.S. Bank National Association, City National Bank, and The Huntington National Bank as Senior Managing Agents.
This Credit Facility refinances the loans outstanding under and replaces the Companys existing Third Amended and Restated Credit Agreement, dated as of April 20, 2016. The new Credit Facility is available to finance the acquisition of aircraft, aircraft engines and related equipment, as well as for general working capital purposes.
The Credit Facility provides a $1.0 billion revolving credit facility for a term of five years and is secured by substantially all of the Companys assets. Total availability under the Credit Facility is subject to a borrowing base calculation that includes specified percentages of the net book value of eligible aircraft engines, airframes, related equipment and other fixed assets ancillary to the service of aircraft or engines.
At the Companys option, loans under the Credit Facility will bear interest at either the base rate or LIBOR, plus, in each case, an applicable interest margin. The base rate will be equal to the highest of (1) the Reference Rate of MUFG Bank, Ltd., as published from time to time, (2) the Federal Funds Rate, as published by the Federal Reserve Bank of New York, plus 0.50%, and (3) the one-month LIBOR rate plus 1.00%. The applicable margin for loans under the Credit Facility ranges from 0.375% to 1.50% per annum in the case of base rate loans and from 1.375% to 2.50% in the case of LIBOR loans, in each case based upon the Leverage Ratio (as defined in the Credit Facility) for the Company and its subsidiaries. The initial applicable margin for loans under the Credit Facility will be 0.375% in the case of base rate loans, and 1.375% in the case of LIBOR loans.
The Credit Facility contains certain usual and customary affirmative and negative covenants which include, among others: financial covenants and limitations on liens; additional indebtedness; further negative pledges; investments; payment of dividends; mergers; and restricted payments. The financial covenants include maintenance of a maximum consolidated leverage ratio, a minimum consolidated interest coverage ratio and a minimum unconsolidated (parent company) interest coverage ratio. The Credit Facility also contains usual and customary events of default, including, among others: non-payment of principal, interest, fees and other amounts; material breach of a representation or warranty; non-performance of covenants and obligations; default on other material debt; bankruptcy or insolvency; material judgments; material adverse changes; and change in control.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant
See the discussion set forth in Item 1.01, Entry into a Material Definitive Agreement, of this Current Report on Form 8-K, which discussion is incorporated herein by this by reference.
Item 7.01 Regulation FD Disclosure
On June 10, 2019, WLFC issued a press release announcing its entry into the Amended Credit Agreement. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference in this Item 7.01.
The information contained in this Item 7.01, including Exhibit 99.1 shall not be deemed filed with the U.S. Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended.
Item 9.01 Financial Statements and Exhibits
The Company hereby furnishes the following exhibit to Item 7.01, Regulation FD Disclosure.