| Item 1.01 | Entry into a Material Definitive Agreement. |
(a) Credit Agreement
On April 14, 2023, Lennox International Inc. (the “Company”) entered into the First Amendment (the “First Amendment”) with JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto, which amended the Credit Agreement, dated as of July 14, 2021 (as amended by the First Amendment, the “Credit Agreement”), among the Company, JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto. Capitalized terms used in this subsection (a) that are not otherwise defined in this subsection (a) are as defined in the Credit Agreement.
The First Amendment amends the Credit Agreement such that, among other things, (i) the revolving loans made under the Credit Agreement bear interest at a rate per annum equal to (a) in the case of ABR Loans, the Alternate Base Rate plus the Base Rate Margin, (b) in the case of Term Benchmark Loans for the Interest Period applicable thereto, the Term Benchmark Margin plus (1) the Adjusted AUD Rate, (2) the Adjusted CDOR Rate, (3) the Adjusted Term SOFR Rate or (4) the Adjusted EURIBOR Rate, as applicable, (c) in the case of Daily Term SOFR Loans for the Interest Period applicable thereto, the Daily Term SOFR Margin plus the Adjusted Daily Term SOFR Rate, (d) in the case of RFR Loans, the RFR Margin plus the Daily Simple RFR, and (e) in the case of Daily Simple SOFR Loans (but only in the case such rate is in effect pursuant to Section 8.1 of the Credit Agreement), the Daily Simple SOFR Margin plus the Adjusted Daily Simple SOFR; and (ii) the swingline loans made under the Credit Agreement bear interest, at the Company’s election, at a rate per annum equal to (a) the Alternate Base Rate plus the Base Rate Margin or (b) the Adjusted Daily Simple SOFR plus the Daily Simple SOFR Margin. The Applicable Margin is based on Moody’s, S&P’s and Fitch’s ratings for the Company’s long-term senior unsecured debt and ranges from 0.00% to 0.75% for ABR Loans and 1.00% to 1.75% for Term Benchmark Loans, Daily Term SOFR Loans, RFR Loans and Daily Simple SOFR Loans. The unused revolving commitment fees payable under the Credit Agreement are also based on these ratings and range from 0.10% to 0.275%. The Company may prepay the loans at any time without premium or penalty, subject to certain limitations, other than customary breakage costs in the case of Term Benchmark Loans and Daily Term SOFR Loans.
The First Amendment does not give effect to any other material changes to the terms and conditions of the Credit Agreement, including with respect to the scheduled maturity of the loans outstanding under the Credit Agreement (which remains July 14, 2026), the representations and warranties, events of default, or affirmative or negative covenants.
A copy of the First Amendment is filed as Exhibit 10.1 hereto. The foregoing description of the First Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the First Amendment, which is incorporated by reference in this subsection (a).
(b) Receivables Purchase Agreement
On April 14, 2023, Lennox Industries Inc., LPAC Corp., and the Company entered into an amendment (“Amendment No. 12”) to the Amended and Restated Receivables Purchase Agreement, initially dated as of November 18, 2011 (as amended and restated, the “Receivables Agreement”), with Victory Receivables Corporation, as a Purchaser, MUFG Bank, Ltd., formerly known as The Bank of Tokyo-Mitsubishi UFJ, Ltd., as administrative agent for the Investors, the purchaser agent for the MUFG Purchaser Group and a MUFG Liquidity Bank, Wells Fargo Bank, National Association, as the purchaser agent for the WFB Purchaser Group and a WFB Liquidity Bank, and PNC Bank, National Association, as the purchaser agent for the PNC Purchaser Group and a PNC Liquidity Bank. Capitalized terms used in this subsection (b) that are not otherwise defined in this subsection (b) are as defined in the Receivables Agreement.
Under Amendment No. 12, (i) the interest rate used to calculate the Bank Rate, which is used to determine the Earned Discount paid to any Purchaser who purchases Asset Interests using Liquidity Funding, was revised to replace LIBOR with Term SOFR, and (ii) applicable technical and conforming changes were made thereto. Amendment No. 12 does not give effect to any other material changes to the terms and conditions of the Receivables Agreement.
