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ELEMENT SOLUTIONS INC

(ESI)
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ELEMENT SOLUTIONS INC : Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Financial Statements and Exhibits (form 8-K)

09/01/2021 | 04:24pm EDT
Item 1.01. Entry into a Material Definitive Agreement.
Incremental Term Loans
On September 1, 2021, Element Solutions Inc (the "Company"), MacDermid,
Incorporated ("MacDermid," and together with the Company, the "Borrowers"),
certain subsidiaries of the Company party thereto, Barclays Bank PLC, as
collateral agent and administrative agent (the "Agent"), and the lenders party
thereto, entered into an incremental term facility (the "Incremental Amendment")
to that certain credit agreement, dated as of January 31, 2019 (as amended
and/or supplemented from time to time, the "Credit Agreement"), among the
Borrowers, the Agent, the lending institutions from time to time parties thereto
and the other entities party thereto.
Pursuant to the Incremental Amendment, the Borrowers borrowed new U.S. Dollar
term loans (the "New USD Term Loans") in an aggregate principal amount of $400
million through a corresponding increase to the Company's existing $750 million
tranche B term loans (the "Existing Term Loans") under the Credit Agreement. The
proceeds of the New USD Term Loans were used to finance a portion of the
purchase price of the previously-announced acquisition of Coventya Holdings SAS
("Coventya"). The Coventya acquisition closed on September 1, 2021 for a
purchase price of approximately €420 million, subject to adjustments.

The Credit Agreement, as amended by the Incremental Amendment, provides for
senior secured credit facilities in an aggregate principal amount of $1.48
billion, consisting of a revolving credit facility in an aggregate principal
amount of $330 million and term loans in an aggregate principal amount of $1.15
billion. Except as set forth in the Incremental Amendment, the New USD Term
Loans have identical terms as the Existing Term Loans, including a maturity date
of January 31, 2026. Certain restricted subsidiaries of the Borrowers acting as
guarantors under the Credit Agreement (the "Guarantors") will guarantee the
Borrowers' obligations under the New USD Term Loans. The New USD Term Loans will
also be secured by the collateral pledged by the Borrowers and the Guarantors
under that certain Pledge and Security Agreement, dated as of January 31, 2019,
among the Borrowers, the Guarantors and the Agent (as amended and/or
supplemented from time to time, the "Security Agreement").

Interest Rate


The applicable interest rate for the term loan borrowings under the Credit
Agreement was not amended by the Incremental Amendment and remains at (a) a
spread of 1.00% per annum for base rate loans and (b) a spread of 2.00% for
eurocurrency rate loans, plus, in each case, an additional rate per annum equal
to (a) for base rate loans, a base rate determined by reference to the highest
of (i) the federal funds effective rate plus 0.50%, (ii) the rate of interest
quoted by The Wall Street Journal as the prime rate in the United States, and
(iii) an adjusted one month London Inter-bank Offered Rate ("LIBOR"), plus
1.00%; and (b) for eurocurrency rate loans, an adjusted LIBOR rate determined by
reference to the cost of funds for the applicable currency for the interest
period relevant to such borrowing, subject to a LIBOR rate floor of 0.0% per
annum. The New USD Term Loans will bear interest at the applicable rate for
eurocurrency rate loans.
Covenants and Events of Default
The Credit Agreement also contains customary covenants including limitations on
additional indebtedness, dividends and other distributions, entry into new lines
of business, use of loan proceeds, capital expenditures, restricted payments,
restrictions on liens, transactions with affiliates, amendments to
organizational documents, accounting changes, sale and leaseback transactions
and dispositions. Upon the occurrence of an event of default, payment of any
outstanding amounts under the Credit Agreement may be accelerated. Borrowings
under the Credit Agreement are also subject to mandatory prepayment under
certain circumstances, with customary exceptions, from the proceeds of permitted
dispositions of assets and from certain insurance and condemnation proceeds.
The foregoing descriptions of the Incremental Amendment and the New USD Term
Loans do not purport to be complete and are qualified in their entirety by
reference to the full text of the   Incremental Amendment  , a copy of which is
filed herewith as Exhibit 10.1 and is incorporated herein by reference.
The foregoing descriptions of the Credit Agreement and the Security Agreement do
not purport to be complete and are qualified in their entirety by reference to
the full text of the   Credit Agreement  , as amended by   Amen    dment
    No.    1  , and the   Security Agreement  , which are attached hereto as
Exhibits 10.2, 10.3 and 10.4, respectively, and incorporated herein by
reference.
Swap Transactions

--------------------------------------------------------------------------------

In anticipation of the close of the Incremental Amendment, on August 6, 2021,
the Company had entered into swap transactions (the "Swaps") with certain banks
included in the syndicate of the New USD Term Loans (the "Hedge
Counterparties"). The Swaps, which replaced the forward starting swaps entered
into by the Company on June 29, 2021, are governed by ISDA Master Agreements
with each of the Hedge Counterparties and enable the Company to effectively
convert the New USD Term Loans, a U.S. dollar denominated debt obligation, into
fixed-rate euro-denominated debt. Under the Swap agreements, the Company is
required to make periodic euro-denominated coupon payments to the Hedge
Counterparties on an aggregate initial notional amount of approximately €340
million in exchange for periodic U.S. dollar-denominated coupon payments from
the Hedge Counterparties on an aggregate initial notional amount of $400
million. Each Swap matures on January 31, 2025.


Item 2.03. Creation of a Direct Financial Obligation.

The information set forth under Item 1.01 regarding the Incremental Amendment and the Swaps is incorporated by reference herein.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits. The following exhibits are filed or furnished herewith: Exhibit Number

              Description
10.1                          Amendment No.3 to Credit Agreement, dated 

September 1, 2021 , among, inter

                            alios, the Company, MacDermid, the subsidiaries 

of the Company from time to

                            time parties thereto, the lenders from time to 

time parties thereto, and

                            Barclays Bank PLC, as administrative and collateral agent
10.2                          Credit Agreement, dated as of January 31, 

2019, by and among, inter alia,

                            the Company, MacDermid, the subsidiaries of the 

borrowers from time to time

                            parties thereto, the lenders from time to time parties thereto, CS, as
                            syndication agent, and Barclays Bank PLC, as administrative agent and
                            collateral agent   (filed as Exhibit 10.1 of

the Company's Current Report on

                            Form 8-K filed on February 5, 2019, and incorporated herein by reference)
10.3                          Amendment No.1, dated November 26, 2019, 

among, inter alios, the Company,

                            MacDermid, the subsidiaries of the Company from 

time to time parties thereto,

                            the lenders from time to time parties thereto, 

and Barclays Bank PLC, as

                            administrative and collateral agent   (filed as 

Exhibit 10.1 of the Company's

                            Current Report on Form 8-K filed on December 3, 

2019, and incorporated herein

                            by reference)
10.4                          Pledge and Security Agreement, dated as of 

January 31, 2019, among the

                            Company, MacDermid and the subsidiaries of the 

borrowers from time to time

                            parties thereto in favor of Barclays Bank PLC, 

as collateral agent (filed

                            as Exhibit 10.2 of the Company's Current Report 

on Form 8-K filed on February

                            5, 2019, and incorporated herein by reference)
104                         Cover Page Interactive Data File (formatted as Inline XBRL)(furnished only)



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