Item 1.01 Entry Into Material Definitive Agreement.
On June 9, 2022 (the "Closing Date"), Lucid Group, Inc. (the "Company") entered
into a Credit Agreement (the "Credit Agreement") with Bank of America, N.A., as
administrative agent (the "Administrative Agent"), as swingline lender and as an
issuing bank, and each other lender and issuing bank party thereto from time to
time, governing a new $1.0 billion senior secured asset-based revolving credit
facility (the "ABL Credit Facility"), which the Company and each other borrower
from time to time party thereto (the "Borrowers") may draw upon from time to
time subject to the terms and conditions set forth therein. The ABL Credit
Facility includes a $350.0 million letter of credit subfacility and a $100.0
million swingline loan subfacility. Subject to certain terms and conditions,
including obtaining such new commitments, the Company may from time to time
request one or more increases in the amount of credit commitments under the ABL
Credit Facility in an aggregate amount up to the sum of $500.0 million plus
certain other amounts.
On the Closing Date, there were no borrowings and no outstanding letters of
credit under the ABL Credit Facility.
Availability
The ABL Credit Facility has an initial aggregate principal commitment amount of
up to $1.0 billion, with availability from time to time subject to the value of
the borrowing base which, subject to eligibility criteria set forth in the
Credit Agreement, equals the sum of, from time to time, (i) 85% of the eligible
accounts receivable of the Loan Parties (as defined below) (other than eligible
credit card receivables and eligible investment grade accounts receivable), plus
(ii) 90.0% of the eligible investment grade accounts receivable of the Loan
Parties, plus (iii) 90.0% of the eligible credit card receivables of the Loan
Parties, plus (iv) the lesser of (x) 75% of the lower of cost or market value of
eligible inventory of the Loan Parties, determined on a first-in-first-out basis
and (y) 85% of the appraised net orderly liquidation value of eligible inventory
of the Loan Parties valued at the lower of cost or market value, determined on a
first-in-first-out basis, plus (v) prior to the Fixed Asset Release Date (as
defined in the Credit Agreement), the lesser of (x) 75% of the lower of cost or
market value of eligible machinery and equipment of the Loan Parties and (y) 85%
of the appraised net orderly liquidation value of eligible machinery and
equipment of the Loan Parties, plus (vi) prior to the Fixed Asset Release Date,
50% of the appraised fair market value of certain eligible fee owned real
property of the Loan Parties plus (vii) 100% of Eligible Cash (as defined in the
Credit Agreement), minus (viii) customary reserves and other adjustments
(including with respect to the real estate component). The amount included as
part of the borrowing base pursuant to clauses (v) and (vi) above may not
exceed, in the aggregate, (x) at any time prior to the second anniversary of the
Closing Date, 50% of the borrowing base and (y) from and after the second
anniversary of the Closing Date, 35% of the borrowing base.
Currency, Interest Rate and Fees
Extensions of credit under the ABL Credit Facility may be denominated in U.S.
dollars, pounds sterling, euro, Canadian dollars, Australian dollars, Swiss
francs, Japanese yen and other agreed currencies from time to time. Borrowings
under the ABL Credit Facility bear interest at a rate per annum equal to (i) for
amounts denominated in U.S. Dollars, at the Company's option, either (A) the
"Alternate Base Rate" (as defined in the Credit Agreement) plus a margin of
0.25% to 0.75% or (B) the "Term SOFR Rate" (as defined in the Credit Agreement)
(which includes a credit spread adjustment of 10 basis points per annum) plus a
margin of 1.25% to 1.75%, (ii) for amounts denominated in Canadian dollars, at
the Company's option, either (A) the "Canadian Prime Rate" (as defined in the
Credit Agreement) plus a margin of 0.25% to 0.75% or (B) the "CDOR Rate" (as
defined in the Credit Agreement) plus a margin of 1.25% to 1.75%, (iii) for
amounts denominated in pounds sterling or Swiss francs, the applicable
"Alternative Currency Daily Rate" (as defined in the Credit Agreement) plus a
margin of 1.25% to 1.75% and (iv) for amounts denominated in euros, Australian
dollars, Japanese yen or any other applicable foreign currency available under
the ABL Credit Facility from time to time, the applicable "Alternative Currency
Term Rate" (as defined in the Credit Agreement) plus a margin of 1.25% to 1.75%.
Each applicable margin set forth above will be determined based on average
quarterly availability under the ABL Credit Facility.
In addition to paying interest on outstanding principal under the ABL Credit
Facility, the Borrowers are required to pay a quarterly commitment fee to the
lenders under the ABL Credit Facility in respect of the unutilized revolving
commitments thereunder at a commitment fee rate equal to 0.25% per annum. The
Borrowers will also pay customary letter of credit fees.
Maturity
Borrowings under the ABL Credit Facility mature, and commitments thereunder
terminate, on the earlier of (i) June 9, 2027 and (ii) the date that is 91 days
prior to the stated maturity date of certain material debt for borrowed money
incurred by any of the Borrowers or their restricted subsidiaries in an
aggregate principal amount of not less than $500.0 million.
Prepayments
If at any time the sum of the outstanding amounts under the ABL Credit Facility
exceed the lesser of (i) the borrowing base and (ii) the aggregate revolving
commitments under the ABL Credit Facility (such lesser amount, the "Line Cap"),
the Company is required to repay outstanding loans and/or cash collateralize
letters of credit in an aggregate amount equal to such excess.
Guarantees and Security
The obligations under ABL Credit Facility are guaranteed by the Company, each
other Borrower, if any, and certain other domestic subsidiaries of the Company
(collectively, the "Loan Parties"). Obligations under the ABL Credit Facility,
and the guarantees of those obligations, are initially secured by a perfected
first-priority security interest in substantially all assets of the Loan
Parties, subject to certain exceptions, including the exclusion of intellectual
property.
Certain Covenants and Events of Default
Prior to the date on which (i) the fixed charge coverage ratio is greater than
1.00 to 1.00 for at least two consecutive fiscal quarters, in each case on a
trailing four fiscal quarter basis, and (ii) the Company has elected to cause
the fixed charge ratio covenant to become effective (the "FCCR Covenant Trigger
Date"), the Borrowers are required to maintain "Liquidity" (as defined in the
Credit Agreement) at all times of at least the dollar equivalent of $1.0
billion. Following the FCCR Covenant Trigger Date, if "Specified Availability"
(as defined in the Credit Agreement) is less than the greater of (A) $62.5
million and (B) 12.5% of the Line Cap (a "Compliance Period Trigger Event"), the
Company is required to comply with a minimum fixed charge coverage ratio of at
least 1.00 to 1.00 as of the end of (x) the last quarter immediately preceding
. . .
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The disclosure required by this item is included in Item 1.01 of this Current
Report on Form 8-K and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On June 15, 2022, the Company issued a press release relating to its entry into
the Credit Agreement. A copy of the press release is attached as Exhibit 99.1 to
this Current Report on Form 8-K.
The information contained in this Item 7.01 and Exhibit 99.1 attached hereto is
being furnished and shall not be deemed "filed" for purposes of Section 18 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and shall
not be deemed incorporated by reference in any filing under the Securities Act
of 1933, as amended, or the Exchange Act, except as expressly set forth by
specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description of Exhibit
10.1 Credit Agreement, dated as of June 9, 2022, by and among Lucid Group,
Inc., as the Borrower Representative, the other Borrowers party thereto
from time to time, the Lenders and Issuing Banks from time to time party
thereto and Bank of America, N.A., as Administrative Agent.
99.1 Press Release dated June 15, 2022.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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