Item 1.01 Entry into a Material Definitive Agreement.
On May 5, 2021, Sensient Technologies Corporation ("Sensient" or the "Company")
entered into a Third Amended and Restated Credit Agreement dated as of May 5,
2021 (the "Credit Agreement") by and among the Company and certain subsidiaries
of the Company as Borrowers, Wells Fargo Bank, National Association, as
Administrative Agent, PNC Bank, National Association, as Syndication Agent, Bank
of America, N.A., ING Bank N.V., Dublin Branch, and TD Bank, N.A. as
Co-Documentation Agents, and the other lenders party thereto. The Credit
Agreement provides for a $350 million senior unsecured revolving credit
facility, with up to $20 million of the facility being available as a
subfacility for standby and commercial letters of credit and sub-limits of up to
$50 million on swing line loans. Funds are available in U.S. dollars, Canadian
dollars, Euros, Swiss Francs, and other major currencies. Proceeds from the
facility will be used to refinance existing indebtedness of the Company and its
subsidiaries and for working capital and other general corporate purpose needs
of the Company.
The Credit Agreement amends and restates the Company's Second Amended and
Restated Credit Agreement, dated as of May 3, 2017, as amended by a First
Amendment dated as of June 22, 2018, and a Limited Waiver and Second Amendment,
dated as of July 28, 2020, to, among other things, (i) terminate the $145
million term loan facility (which had no amounts outstanding), (ii) extend the
maturity of Sensient's revolving credit facility from May 2022 to May 2026, and
(iii) modify certain other provisions of the Credit Agreement as set forth
therein.
Borrowings under the Credit Agreement bear interest at, the Company's option, of
(i) a fluctuating London Interbank Offered Rate ("LIBOR") plus 1.00-1.50%
depending on the Company's current Net Leverage Ratio (as defined below) and
(ii) a base rate of the highest of (A) the Federal Funds Rate plus 0.5%, (B) the
prime commercial lending rate (as established by the Administrative Agent from
time to time), and (C) the daily LIBOR for a one-month interest period plus
1.00%.
The Credit Agreement requires Sensient to generally maintain (i) a ratio of
consolidated total funded net debt to consolidated EBITDA ("Net Leverage Ratio")
of not more than 3.50 to 1.00, and (ii) an interest charge coverage ratio of not
less than 3.00 to 1.00. The Credit Agreement also includes other covenants that
are customary in transactions of this type.
The Credit Agreement includes customary events of default, including, among
other things, payment default, covenant default, breach of representation or
warranty, bankruptcy or insolvency event, cross-default to other material
indebtedness, material ERISA events, material money judgments, and a change in
control. If an event of default occurs, the Administrative Agent will be
entitled to take various actions, including the acceleration of amounts due
under the Credit Agreement and the termination of the credit facility.
Certain lender parties to the Credit Agreement and certain of their respective
affiliates have performed in the past, and may from time to time perform in the
future, commercial banking and other financial advisory services for the Company
and its affiliates for which they have received, and/or will receive, customary
fees and expenses.
The foregoing summary does not purport to be complete and is qualified in its
entirety by reference to the Credit Agreement, which is filed with this Current
Report on Form 8-K as Exhibit 10.1 and is incorporated herein by reference.
Additionally, on May 6, 2021, Sensient entered into a Third Amendment dated as
of May 6, 2021 to Note Purchase Agreement dated as of November 6, 2015, a Second
Amendment dated as of May 6, 2021 to Note Purchase Agreement dated as of May 3,
2017, a First Amendment dated as of May 6, 2021 to Note Purchase Agreement dated
as of November 1, 2018, and a Fourth Amendment dated as of May 6, 2021 to Note
Purchase Agreement dated as of April 5, 2013 (collectively, the "Note Purchase
Agreement Amendments") by and among the Company and the Noteholders (as defined
in each of the Note Purchase Agreement Amendments). The Note Purchase Agreement
Amendments amend each note purchase agreement to make substantially conforming
changes to the underlying note purchase agreements as were made to the Credit
Agreement, including the financial covenants described above, each as set forth
in the Note Purchase Agreement Amendments.
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The foregoing is intended to be a general description of the Note Purchase
Agreement Amendments but does not constitute a full description of them.
Reference is made to the Note Purchase Agreement Amendments, which are attached
as Exhibits 4.1, 4.2, 4.3, and 4.4.
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 of this Current Report on Form 8-K is
incorporated by reference into this Item 2.03.
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