Item 1.01. Entry into a Material Definitive Agreement.
On July 29, 2022, Kirby Corporation ("Kirby") entered into a credit agreement
(the "2027 Credit Agreement") with a group of commercial banks that replaces
Kirby's amended and restated credit agreement previously in place (the "2024
Credit Agreement") with a $500 million revolving credit facility and a term loan
facility in an amount of $250 million with a maturity date of July 29, 2027 (the
"Maturity Date"). The 2027 Credit Agreement provides for a variable interest
rate based on the Secured Overnight Financing Rate ("SOFR") or a base rate
calculated with reference to the prime rate quoted by The Wall Street Journal,
the Federal Reserve Bank of New York Rate plus 0.5%, or the adjusted SOFR rate
for a one month interest period plus 1.0%, among other factors (the "Alternate
Base Rate"). The interest rate varies with Kirby's credit rating and is
currently 137.5 basis points over SOFR or 37.5 basis points over the Alternate
Base Rate. Revolving credit loans are repayable on the Maturity Date. The term
loan is repayable in quarterly installments commencing December 31, 2022, in
increasing percentages of the original principal amount of the loan, with the
remaining unpaid balance of $43.8 million payable on the Maturity Date, assuming
no prepayment. The 2027 Credit Agreement contains covenants including an
interest coverage ratio and debt-to-capitalization ratio. In addition to
financial covenants, the 2027 Credit Agreement contains covenants that, subject
to exceptions, restrict debt incurrence, mergers and acquisitions, sales of
assets, dividends and investments, liquidations and dissolutions, capital
leases, transactions with affiliates, and changes in lines of business. The 2027
Credit Agreement specifies certain events of default, upon the occurrence of
which the maturity of the outstanding loans may be accelerated, including the
failure to pay principal or interest, violation of covenants and default on
other indebtedness, among other events. Borrowings under the 2027 Credit
Agreement may be used for general corporate purposes, including acquisitions. As
of July 29, 2022, Kirby had outstanding borrowings under the 2027 Credit
Agreement revolving credit facility of $35.0 million and outstanding borrowings
under the 2027 Credit Agreement term loan facility of $250.0 million. The
proceeds were used to repay $285.0 million in borrowings previously outstanding
under the 2024 Credit Agreement, which was then terminated.
Item 1.02. Termination of a Material Definitive Agreement.
As described in Item 1.01 of this report, proceeds of the 2027 Credit Agreement
were used to refinance the outstanding indebtedness under the 2024 Credit
Agreement, which was then terminated.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of a Registrant.
On July 29, 2022, Kirby borrowed $35.0 million under the revolving credit
facility and $250.0 million under the term loan facility described in Item 1.01
of this report. The terms of the borrowings are summarized in the description of
the 2027 Credit Agreement in Item 1.01.
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