Item 1.01 |
Entry into a Material Definitive Agreement. |
Amended and Restated Credit Agreement
On June 8, 2023 (the “Closing Date”), the Company and certain of its subsidiaries entered into the First Amendment to Amended and Restated Credit Agreement (the “First Amendment”), dated as of June 8, 2023 (the “First Amendment Effective Date”), which amends that certain Amended and Restated Credit Agreement, dated as of April 1, 2022 (as amended by the First Amendment, the “Amended and Restated Credit Agreement”), by and among the Company, certain subsidiaries of the Company as borrowers or guarantors, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent.
The First Amendment provides for a $305 million Incremental Term Loan (the “First Amendment Incremental Term Loans”). In addition, the Amended and Restated Credit Agreement permits the Company to increase the commitments under the agreement from time to time after the date of the First Amendment Effective Date by up to $200 million in the aggregate, subject to, among other things, receipt of additional commitments from existing and/or new lenders and pro forma compliance with certain financial covenants.
As of the First Amendment Effective Date (after giving effect to the incurrence of the First Amendment Incremental Term Loans), there were approximately $591.3 million of term loan facility loans outstanding and no revolving credit facility loans outstanding under the Amended and Restated Credit Agreement. The First Amendment Incremental Term Loans were used, among other things, to repay certain existing indebtedness of Hisco, HISCO Acquisition Subsidiary I, Inc. and HISCOCAN Inc. and their respective subsidiaries and to pay fees and expenses incurred in connection with the Transaction and the First Amendment.
Loans under the Amended and Restated Credit Agreement (including the First Amendment Incremental Term Loans) bear interest, at the Company’s option, at a rate equal to (i) the Alternate Base Rate or the Canadian Prime Rate (each as defined in the Amended and Restated Credit Agreement), plus, in each case, an additional margin ranging from 0.0% to 1.75% per annum, depending on the total net leverage ratio of the Company and its restricted subsidiaries as of the most recent determination date under the Amended and Restated Credit Agreement or (ii) the Adjusted Term SOFR Rate or the CDOR Rate (each as defined in the Amended and Restated Credit Agreement), plus, in each case, an additional margin ranging from 1.0% to 2.75% per annum, depending on the total net leverage ratio of the Company and its restricted subsidiaries as of the most recent determination date under the Amended and Restated Credit Agreement.
Each loan under the Amended and Restated Credit Agreement (including the First Amendment Incremental Term Loans) matures on April 1, 2027, at which time all outstanding loans, together with all accrued and unpaid interest, must be repaid and the revolving credit facility commitments terminate. The Company is required to repay principal on the First Amendment Incremental Term Loans each quarter (commencing with September 30, 2023) in an amount equal to $3,812,500. The Company is also required to prepay the term loans (including First Amendment Incremental Term Loans) with the net cash proceeds from any disposition of certain assets (subject to reinvestment rights) or from the incurrence of any unpermitted debt.
Subject to certain exceptions set forth in the Amended and Restated Credit Agreement, the obligations of the Company and its U.S. subsidiaries under the First Amendment are guaranteed by the Company and certain of the Company’s U.S. subsidiaries and the obligations of each of the Company’s Canadian subsidiaries under the Amended and Restated Credit Agreement are guaranteed by the Company and certain of its U.S. and Canadian subsidiaries.