ITEM 1.01
|
ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
|
Amendment to NFC Credit Agreement
On May 23, 2019, Navistar Financial Corporation (NFC) entered into an Amendment No. 4 (the Amendment)
to the Third Amended and Restated Credit Agreement, dated as of May 27, 2016 (as amended, the Credit Agreement), by and among NFC and Navistar Financial, S.A. de C.V., Sociedad Financiera De Objeto Multiple, Entidad Regulada, a
Mexican corporation, as borrowers, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and Bank of America, N.A., as syndication agent, pursuant to which, among other things, (i) the revolving commitments were
increased to $747.5 million, (ii) the revolving maturity date was extended to May 23, 2024, (iii) the Mexican revolving facility was increased to $100 million, (iv) the swingline facility was increased to
$100 million, (v) the provisions allowing NFC to increase the size of the facility, subject to obtaining commitments from existing or new lenders to provide additional or increased revolving commitments and/or additional term loans, were
amended to permit a maximum facility size of $850 million after giving effect to any such increase, (vi) the permitted loan to value ratio for certain used truck loans made by NFC was increased from 65% to 85%, (vii) the investment
covenant was amended to add (a) an investment basket of $200 million permitting loans to an affiliate of NFC, (b) a general investment basket permitting investments in the aggregate amount of the unused portion of the net income-based
dividend basket and (c) a general investment basket of $10 million, (viii) the maximum consolidated leverage ratio covenant was revised to provide for quarterly testing, (ix) the minimum collateral coverage ratio covenant was
revised to provide for quarterly testing and was reduced from 1.35 to 1.00 to 1.25 to 1.00, (x) the maximum consolidated leverage ratio governor for the net income-based dividend basket was increased from 3.75:1.00 to 4.25:1.00, (xi) the dividend
covenant was amended to add a dividend basket permitting dividends in the aggregate amount of any permanent repayments of the up to $200 million affiliate loan, and (xii) provisions to address the planned elimination of LIBOR were updated.
In connection with the Amendment, NFC prepaid in full the loans outstanding under its senior secured term loan facility.
Under the terms
of the Credit Agreement (i) the interest rate on revolving loans is based, at the borrowers option, on an adjusted eurodollar rate, plus a margin of 2.25% to 4.00%, or a base rate, plus a margin of 1.25% to 3.00% and (ii) the
commitment fee percentage applicable to revolving loans is 0.375% to 0.625%. In connection with the Amendment, NFC paid certain fees, the total of which NFC does not believe is material to its financial position or results of operations.
The foregoing description of the Amendment is qualified in its entirety by reference to the Amendment, which is filed as Exhibit 10.1 and
incorporated by reference herein.