Item 1.01 Entry into a Material Definitive Agreement
New Senior Secured Credit Facilities
On
Interest. The interest rates applicable to borrowings under the Term Loan Facility and the Revolving Credit Facility are based on a fluctuating rate of interest measured by reference to either, at the Company's option, (i) a base rate, plus an applicable margin, or (ii) a reserve-adjusted London Interbank Offered Rate ("LIBOR"), plus an applicable margin (or, in the case of Revolving Credit Facility borrowings denominated in Canadian dollars, the Canadian dollar bankers' acceptances rate).
The applicable margin for the Term Loan Facility ranges, depending on Beacon's consolidated total leverage ratio (consolidated total indebtedness to consolidated EBITDA, each as defined in the Term Loan Credit Agreement), from 1.25% to 1.50% per annum in the case of base rate borrowings and 2.25% to 2.50% per annum in the case of LIBOR borrowings. The applicable margin for Revolving Credit Facility borrowings will be based on the Company's quarterly average excess availability as determined by reference to a borrowing base and ranges from 0.25% to 0.75% per annum in the case of base rate borrowings and 1.25% to 1.75% per annum in the case of LIBOR borrowings.
Repayments. In connection with the Term Loan Facility, Beacon must make
scheduled quarterly principal payments of
Prepayments. Subject to certain exceptions, the Term Loan Facility is subject to
mandatory prepayments, including the amount equal to: (i) 100% of the net cash
proceeds from issuances or the incurrence of debt for borrowed money by the
Company or any of its restricted subsidiaries (other than certain indebtedness
permitted by the Term Loan Facility); (ii) 100% (with stepdowns to 50% and 0%
based upon achievement of specified consolidated secured leverage ratios
(consolidated secured indebtedness to consolidated EBITDA, each as defined in
the Term Loan Credit Agreement)) of the net cash proceeds from all non-ordinary
course asset sales or other dispositions of property (including as a result of
the sale of equity securities of any subsidiary of the Company to a third-party)
by the Company or any of the restricted subsidiaries in excess of a certain
amount and subject to customary reinvestment provisions and certain other
exceptions (including with regard to ABL Priority Collateral (as defined
below)); (iii) 100% of the net cash proceeds from insurance and condemnation
events of the Company or any of the restricted subsidiaries in excess of a
certain amount and subject to customary reinvestment provisions and certain
other exceptions; and (iv) 50% (with stepdowns to 25% and 0% based upon
achievement of specified consolidated secured leverage ratios) of annual excess
cash flow of the Company and its subsidiaries, commencing with the fiscal year
of the Company ending on or about
The Revolving Credit Facility is required to be prepaid to the extent extensions of credit thereunder exceed the applicable borrowing base. In addition, if excess availability as determined by reference to a borrowing base falls below a specified threshold or if certain events of default occur under the Revolving Credit Facility, all cash proceeds of collateral pledged under the Revolving Credit Facility will be applied to repay the Revolving Credit Facility or secure certain obligations thereunder, subject to the right to reborrow thereafter under the Revolving Credit Facility. The borrowers may voluntarily repay and reborrow outstanding loans under the Revolving Credit Facility at any time without a premium or penalty, other than customary "breakage" costs with respect to LIBOR loans.
Maturity. The Term Loan Facility will mature seven years from the Closing Date. The Revolving Credit Facility will mature five years from the Closing Date.
Guarantee and Security. Borrowings under the Term Loan Facility are guaranteed
by certain of the Company's existing and future domestic subsidiaries, subject
to customary exceptions and limitations. Borrowings under the Revolving Credit
Facility are guaranteed by the Company and certain of the Company's existing and
future domestic subsidiaries; additionally,
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certain non-
The Revolving Credit Facility is secured by a first-priority lien over substantially all of the Company's and each guarantor's accounts, chattel paper, deposit accounts, books, records and inventory (as well as intangibles related thereto), subject to certain customary exceptions (the "ABL Priority Collateral") and a second-priority lien over substantially all of the Company's and each guarantor's other assets, including all of the equity interests of any subsidiary held by the Company or any guarantor, subject to certain customary exceptions (the "Non-ABL Priority Collateral"). The Term Loan Facility is secured by a shared first-priority lien on the Non-ABL Priority Collateral and a shared second-priority lien on the ABL Priority Collateral. . . .
Item 2.03 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 above is incorporated by reference into this Item 2.03.
Item 8.01 Other Events
On
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pursuant to the Supplemental Indenture, the 2025 Senior Notes were redeemed at a price equal to 102.438% of the principal amount, plus accrued and unpaid interest on the 2025 Senior Notes to, but excluding, the date of redemption.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits Exhibit Number Description 10.1 Amended and Restated Term Loan Credit Agreement, datedMay 19, 2021 , by and amongBeacon Roofing Supply, Inc. , as borrower,Citibank, N.A ., as administrative agent and collateral agent, and the lenders from time to time party thereto . 10.2 Second Amended and Restated Credit Agreement, datedMay 19, 2021 , by and amongBeacon Roofing Supply, Inc. , as a guarantor, certain subsidiaries ofBeacon Roofing Supply, Inc. , party thereto as borrowers, and lenders from time to time party thereto andWells Fargo Bank, N.A. , as administrative agent for the lenders . 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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