Item 1.01 Entry into a Material Definitive Agreement.
On
The New Credit Facility replaced the Company's existing
Borrowings under the New Credit Facility bear interest, at the Company's option,
either at (i) the Base Rate, which is defined as the greatest of (a) the
Administrative Agent's prime rate, (b) the federal funds effective rate, plus
0.50% and (c) the Term SOFR (Secured Overnight Financing Rate) rate plus 1.0%;
plus, in the case of each of clauses (a) through (c), an applicable margin
ranging from 0.125% to 0.750% per annum, based on the Company's credit ratings
(as determined by
Under the New Credit Facility, the interest rate margins, commitment fee and letter of credit usage fee are subject to upward or downward adjustments if the Company achieves, or fails to achieve, certain specified sustainability targets with respect to workplace safety and greenhouse gas emissions. Such upward or downward sustainability adjustments may be up to 0.05% per annum in the case of the interest rate margins and letter of credit usage fee and up to 0.01% per annum in the case of the commitment fee.
2
--------------------------------------------------------------------------------
The New Credit Facility is unsecured, and contains customary restrictions on the ability of the Company and its subsidiaries to (i) incur certain debt, (ii) make certain acquisitions of other entities, (iii) incur liens, (iv) dispose of assets and (v) engage in transactions with affiliates. These covenants are subject to a number of significant exceptions and limitations. The New Credit Facility also requires that the Company maintain a maximum ratio of total indebtedness to EBITDA (earnings before interest expense, taxes, depreciation and amortization), and a minimum interest coverage ratio during the term of the New Credit Facility.
The New Credit Facility contains customary events of default. If an event of
default under the New Credit Facility occurs and is continuing, then the
Administrative Agent shall, at the request of, or may, with the consent of, the
required lenders, declare any outstanding obligations under the New Credit
Facility to be immediately due and payable. In addition, if an actual or deemed
entry of an order for relief with respect to the Company is made under
The obligations under the New Credit Facility are not guaranteed by any subsidiary of the Company.
The foregoing description of the New Credit Facility is qualified in its entirety by reference to the complete text of the New Credit Facility, a copy of which is filed as Exhibit 10.01 to this Current Report on Form 8-K and incorporated herein by reference.
Some of the lenders under the New Credit Facility and the 2021 Credit Facility and/or their respective affiliates have from time to time performed and may in the future perform various commercial banking, investment banking and other financial advisory services for the Company and/or its subsidiaries in the ordinary course of business, for which they received or will receive customary fees and commissions. In addition, an affiliate of one of the Lenders is the Trustee under the Indentures governing the Company's 5.000% Notes due 2023, 4.750% Notes due 2025, 3.750% Notes due 2026, 4.875% Notes due 2029 and 4.875% Notes due 2030.
Item 1.02 Termination of a Material Definitive Agreement.
Effective upon the execution and delivery of the New Credit Facility, the 2021 Credit Facility was terminated and is of no further force or effect (other than obligations thereunder which expressly survive the termination of the 2021 Credit Facility). The information set forth in Item 1.01 above with respect to the 2021 Credit Facility and the termination thereof is hereby incorporated by reference into this Item 1.02.
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 hereby incorporated by reference into this Item 2.03.
3
--------------------------------------------------------------------------------
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit No. 10.01 Credit Agreement, dated as ofJuly 19, 2022 , amongFlex Ltd. and certain of its subsidiaries from time to time party thereto, as borrowers,Bank of America, N.A ., as Administrative Agent, an L/C Issuer and a SwingLine Lender , and the other L/C Issuers, SwingLine Lenders and Lenders party thereto . 104 Cover Page Interactive Data File (formatted as Inline XBRL). 4
--------------------------------------------------------------------------------
© Edgar Online, source