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OFFON

FEDERATED HERMES, INC.

(FHI)
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FEDERATED HERMES, 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)

07/30/2021 | 04:22pm EDT
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On July 30, 2021, Federated Hermes, Inc. (Federated Hermes) entered into an
unsecured Fourth Amended and Restated Credit Agreement by and among Federated
Hermes, certain of its subsidiaries as guarantors party thereto, a syndicate of
eleven banks as Lenders party thereto, PNC Bank, National Association, as
administrative agent, PNC Capital Markets LLC, as sole bookrunner and joint lead
arranger, Citigroup Global Markets, Inc., as joint lead arranger, Citibank, N.A.
as syndication agent, and Toronto-Dominion Bank, New York Branch as
documentation agent (Credit Agreement). The Credit Agreement amended and
restates Federated Hermes' prior unsecured Third Amended and Restated Credit
Agreement, which was dated June 5, 2017 and scheduled to mature on June 5, 2022
(Prior Credit Agreement). The Credit Agreement includes a $350 million revolving
line of credit facility, and includes a $200 million optional increase (or
accordion) feature. The Credit Agreement was entered into to refinance and renew
Federated Hermes' current $375 million revolving line of credit facility, which
also included a $200 million optional increase (or accordion) feature. As of
July 30, 2021, Federated Hermes had $60 million of borrowings outstanding under
the previous revolving credit facility.

The Credit Agreement expires on July 30, 2026. The Credit Agreement requires
outstanding principal to be paid on the expiration date and does not require
scheduled principal payments. Federated Hermes, however, may elect to make
principal payments in amounts determined at its discretion. Outstanding
borrowings under the revolving credit facility bear interest, based on Federated
Hermes' election, at either the London Interbank Offering Rate (LIBOR) plus a
spread or a base rate (equal to the highest of the administrative agent's prime
rate, the overnight bank funding rate plus a spread, or daily LIBOR plus a
spread) plus a spread. Federated Hermes elected an interest rate equal to LIBOR
plus a spread for the $60 million outstanding on the revolving line of credit
and, assuming current interest rate levels are maintained, the interest rate is
projected to be approximately 1.22% for the third quarter of 2021. The Credit
Agreement provides for a replacement reference interest rate index upon the
eventual discontinuation of LIBOR, each having a benchmark adjustment applied
based on its historical relationship to LIBOR, which can be either the term
Secured Overnight Financing Rate (SOFR) plus a spread, daily simple SOFR plus a
spread, or another alternative interest rate index selected by the
administrative agent and Federated Hermes plus a spread. The commitment fee
under the Credit Agreement is 0.10% per annum on the daily amount of the unused
portion of each Lender's commitment. The Credit Agreement also contains
sustainability adjustment provisions under which the commitment fee, letter of
credit fee, and applicable margin (spread) can be adjusted based on Federated
Hermes' performance against any subsequently agreed upon key performance
indicators with respect to environment, social and governance targets of
Federated Hermes.

The Credit Agreement, similar to the Prior Credit Agreement, includes an
interest coverage ratio covenant (consolidated earnings before interest, taxes,
depreciation and amortization (EBITDA) to consolidated interest expense) and a
leverage ratio covenant (consolidated debt to consolidated EBITDA) as well as
other customary terms and conditions, such as representations and warranties,
affirmative and negative financial covenants, reporting requirements and other
non-financial covenants. Federated Hermes was in compliance with all covenants
as of July 30, 2021. The Credit Agreement, similar to the Prior Credit
Agreement, also has certain stated events of default and cross default
provisions which would permit the lenders/counterparties to accelerate the
repayment of the debt if not cured within the applicable grace periods. The
events of default generally include breaches of contract, failure to make
required loan payments, insolvency, cessation of business, deterioration in
credit rating to below investment grade, notice of lien or assessment, and other
proceedings, whether voluntary or involuntary, that would require the repayment
of amounts borrowed. The Credit Agreement, similar to the Prior Credit
Agreement, also requires certain subsidiaries to enter into a Third Amended and
Restated Continuing Agreement of Guaranty and Suretyship to guarantee payment of
all obligations incurred through the Credit Agreement.


ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.

The disclosure set forth above under Item 1.01 is incorporated herein by reference.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits:

        Exhibit 104                 Cover Page Interactive Data File 

(embedded within the Inline XBRL

                                    document)



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