Item 1.01 Entry into a Material Definitive Agreement.
On
Amended and Restated Global ABL Facility
Pursuant to the ABL Agreement, the Company amended and restated its existing ABL
credit agreement to provide for a multi-currency, global, asset-based revolving
credit facility with a maximum borrowing amount of
• a$705.0 million U.S. tranche with a$30.0 million sub-limit for Canadian borrowings (the "U.S. /Canadian Facility"), with certain of the Company'sU.S. subsidiaries, as the initialU.S. borrowers (collectively, the "U.S. Borrowers"), andMRC Global (Canada) Ltd , as the initial Canadian borrower (the "Canadian Borrower"), available inU.S. dollars, with respect toU.S. borrowers, and Canadian Dollars andU.S. dollars, with respect to Canadian borrowers; • a$7.5 million U.K. tranche, withMRC Global (UK) Limited , as the initialU.K. borrower, available in British pounds sterling,U.S. dollars and Euros; • a$10.0 million Australian tranche, withMRC Global Australia Pty Ltd , as the initial Australian borrower, available in Australian dollars, British pounds sterling,U.S. dollars and Euros; • a$10.5 million Dutch tranche, withMRC Global (Netherlands) B.V. , as the initial Dutch borrower, available inU.S. dollars and Euros; • a$5.0 million Belgian tranche, withMRC Global (Belgium) NV , as the initial Belgian borrower, available inU.S. dollars and Euros; and • a$12.0 million Norwegian tranche, withMRC Global Norway AS , as the initial Norwegian borrower, available in British pounds sterling,U.S. dollars, Euros and Norwegian kroner.
Each of the facilities includes sub-limits for letters of credit and swingline loans. In this Form 8-K, the terms
• "ABL Borrowers" means all of the borrowers under the facilities described above; • "Foreign Borrowers" means all of the ABL Borrowers, other than theU.S. Borrowers and the Canadian Borrower; and • "Foreign Facilities" means all of the tranches of the Global ABL Facility other than theU.S. /Canadian Facility.
The Global ABL Facility allows the addition of other borrowers in the above
jurisdictions and also allows for potential future borrowers organized in
Accordion. The Global ABL Facility allows for incremental increases of the
commitments up to an aggregate of
Maturity. The scheduled maturity date of the Global ABL Facility is
Borrowing Base. With respect to each Facility, advances will be limited to
(a) the aggregate commitments under the Facility and (b) the sum of the
following for the
• 85% of the book value of eligible accounts receivable; plus • for theU.S. /Canadian Facility only: • 90% of the book value of eligible accounts receivable owing by investment grade account debtors, and • 100% of eligible pledged cash of theU.S. /Canadian Borrowers; plus • for all Facilities, the lesser of: • 70% of the net book value of eligible inventory (adding back the LIFO reserve with respect to theU.S. /Canadian Facility); and • 85% of the appraised net orderly liquidation value of eligible inventory (net of current monthly shrinkage reserve calculated in accordance with GAAP and valued at cost); 2
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• minus certain reserves.
Each Foreign Borrower has a separate stand-alone Borrowing Base that limits the
Foreign Borrower's ability to borrow under its respective Facility, subject to
an exception allowing the Foreign Borrowers to utilize excess availability under
the
Guarantees. Obligations of the
Security. Obligations under the
Interest Rates and Fees. Prior toDecember 1, 2021 , the applicable margin for borrowings under the Global ABL Facility will be set at Level II of the definition of "Applicable Margin" under the ABL Agreement as determined by a consolidated fixed charge ratio greater than 1.50 to 1.00 but less than or equal to 2.25 to 1.00, which means that borrowings will bear interest at a rate equal to: • in the case ofU.S. dollar and euro advances, • LIBOR plus 1.50%, • EURIBOR plus 1.50%, • for base rate advances in theU.S. orCanada , theU.S. Base Rate (or Canadian Base Rate if inCanada ) plus 0.50%, or • for base rate advances outside theU.S. andCanada , an applicable Base Rate plus 1.50%; • in the case of Nowegian Kroner advances, NIBOR plus 1.50% or the Norwegian Base Rate plus 1.50%; • in the case of Canadian dollar advances, the BA Equivalent Rate plus 1.50% or the Canadian Prime Rate plus 0.50%; • in the case of British pound sterling advances, SONIA plus 1.50%, or theUK Base Rate plus 1.50%; or • in the case of Australian dollar advances, the AustralianBank Bill Rate plus 1.50% or the Australian Base Rate plus 1.50%.
On and after
In addition to paying interest on outstanding principal under the Global ABL Facility, the ABL Borrowers are required to pay a commitment fee in respect of unutilized commitments, which is equal to 0.375% per annum for each Facility (0.25% per annum if utilization of a Facility exceeds 35% of the aggregate commitments under the Facility).
Voluntary Prepayment. The ABL Borrowers will be able to voluntarily prepay the principal of any advance without penalty or premium at any time in whole or in part, subject to certain breakage costs.
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Restrictive Covenants and Other Matters. The Global ABL Facility requires the Company and its restricted subsidiaries, on a consolidated basis, to maintain a fixed charge coverage ratio (defined as the ratio of EBITDA to the sum of cash interest, principal payments on indebtedness, unfinanced capital expenditures and accrued income taxes) of at least 1.0 to 1.0 when excess availability is less than the greater of:
• 10% of the 'Line Cap' under the Global ABL Facility (defined as the
lesser of (a) the sum of the lower of (i) each Facility's borrowing base, . . .
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 above and is incorporated by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit No. Exhibit Description 10.1 Fourth Amended and Restated Loan, Security and Guarantee Agreement, dated as ofSeptember 3, 2021 , amongMRC Global (US) Inc. ,Greenbrier Petroleum Corporation ,McJunkin Red Man Development Corporation ,Midway-Tristate Corporation ,Milton Oil & Gas Company ,MRC Global Management Company ,MRC Global Services Company LLC ,Ruffner Realty Company andThe South Texas Supply Company, Inc. , asU.S. Borrowers and Guarantors,MRC Global Inc. , as a guarantor,MRC Global Australia Pty Ltd. , as Australian Borrower,MRC Global (Belgium) NV , as Belgian Borrower,MRC Global (Canada) Ltd , as Canadian Borrower,MRC Global (Netherlands) B.V. , as Dutch Borrower,MRC Global Norway AS , as Norwegian Borrower,MRC Global (UK) Limited , asUK Borrower, the other borrowers from time to time party thereto, certain financial institutions as lenders andBank of America, N.A ., as Administrative Agent, Security Trustee andCollateral Agent and BOFA Securities Inc. , as Lead Arranger and Book Manager. 4
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10.2 Notice of Amendment and Confirmation of Intercreditor Agreement, datedSeptember 3, 2021 , by and betweenBank of America, N.A ., in its capacity as administrative agent and collateral agent for the Revolving Credit Lenders under the Revolving Credit Agreement,U.S. Bank National Association , in its capacity as collateral trustee for the Term Secured Parties, the Additional Term Secured Parties, if any, and the Subordinated Lien Secured Parties, if any,MRC Global Inc. and certain of its subsidiaries. 104 Cover Page Interactive Data File - The cover page XBRL tags from this Current Report on Form 8-K are embedded within the Inline XBRL document. 5
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