UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 20, 2021
WORTHINGTON INDUSTRIES, INC.
(Exact Name of Registrant as Specified in its Charter)
Ohio | | 1-8399 | | 31-1189815 |
(State or Other Jurisdiction of Incorporation) | | (Commission File Number) | | (I.R.S. Employer Identification Number) |
200 Old Wilson Bridge Road, Columbus, Ohio 43085
(Address of Principal Executive Offices) (Zip Code)
(614) 438-3210
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Shares, without par value | WOR | NYSE |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b‑2 of the Securities Exchange Act of 1934 (§240.12b‑2 of this chapter).
Emerging growth company | | ☐ |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | | ☐ |
Item 1.01.Entry into a Material Definitive Agreement.
On August 20, 2021, Worthington Industries, Inc. (the “Registrant”) amended and restated its existing five-year, revolving credit facility (provided under the Second Amended and Restated Credit Agreement, dated as of February 16, 2018 (the “Existing Credit Agreement”)). The aggregate commitments under the amended and restated revolving credit facility remain at $500 million. The final maturity of the revolving credit facility was extended from February 16, 2023 to August 20, 2026. The Third Amended and Restated Credit Agreement, dated as of August 20, 2021 (the “Third Amended and Restated Credit Agreement”), was entered into among the Registrant, as a Borrower; PNC Bank, National Association, as a Lender, the Swingline Lender, an Issuing Bank and Administrative Agent; JPMorgan Chase Bank, N.A. and Bank of America, N.A., as Lenders and Syndication Agents; U.S. Bank National Association, Wells Fargo Bank, National Association, The Huntington National Bank, Fifth Third Bank, National Association, The Northern Trust Company and BMO Harris Bank, N.A., as Lenders (collectively with PNC Bank, National Association, JPMorgan Chase Bank, N.A. and Bank of America, N.A., the “Lenders”); and Truist Bank (as successor to Branch Banking and Trust Company), as a Departing Lender (the “Departing Lender”); with U.S. Bank National Association, Wells Fargo Bank, National Association and The Huntington National Bank serving as Co-Documentation Agents; and JPMorgan Chase Bank, N.A., PNC Capital Markets LLC and Bank of America, N.A. serving as Joint Bookrunners and Joint Lead Arrangers.
PNC Bank, National Association served as a lender, an issuing bank, the swingline lender and administrative agent prior to the amendment and restatement of the Existing Credit Agreement and continues to serve in those capacities under the Third Amended and Restated Credit Agreement. JPMorgan Chase Bank, N.A. served as a lender and syndication agent prior to the amendment and restatement of the Existing Credit Agreement and serves as a lender, syndication agent, a joint bookrunner and a joint arranger under the Third Amended and Restated Credit Agreement. Bank of America, N.A., served as a co-documentation agent prior to the amendment and restated of the Existing Credit Agreement and will now serve as a syndication agent, a joint bookrunner and a joint arranger under the Third Amended and Restated Credit Agreement. PNC Capital Markets LLC served as a joint bookrunner and a joint lead arranger prior to the amendment and restatement of the Existing Credit Agreement and continues to serve in those capacities under the Third Amended and Restated Credit Agreement. U.S. Bank National Association and Wells Fargo Bank, National Association served as co-documentation agents prior to the amendment and restatement of the Existing Credit Agreement and each will serve in that capacity, along with The Huntington National Bank as a co-documentation agent, under the Third Amended and Restated Credit Agreement. The Departing Lender had been a lender prior to the amendment and restatement of the Existing Credit Agreement but is no longer a lender under the Third Amended and Restated Credit Agreement. In addition, certain of the Lenders under the Third Amended and Restated Credit Agreement provide other banking services not specifically outlined in the Third Amended and Restated Credit Agreement to the Registrant, the subsidiaries of the Registrant and their respective joint ventures, in the ordinary course of their respective businesses.
Availability under Commitments
The Third Amended and Restated Credit Agreement represents a syndicated unsecured revolving credit facility under which aggregate revolving credit commitments of $500 million will be available in U.S. Dollars. In addition, the Registrant may from time to time elect to increase the aggregate revolving credit commitments or enter into one or more tranches of term loans (in each case, subject to the consent of the Lenders who elect to make such loans), in minimum increments of $10 million, so long as, after giving effect thereto, the aggregate amount of such increases and all such incremental term loans does not exceed $300 million. The incremental accordion facility under the Third Amended and Restated Credit Agreement is on the same terms as such facility was provided for under the Existing Credit Agreement.
Pursuant to the Third Amended and Restated Credit Agreement, Worthington Industries International S.a.r.l, a private limited liability company formed in Luxembourg (“LuxCo”), has been removed as a Borrower under the amended and restated revolving credit facility and all amounts payable by Luxco under the Existing Credit Agreement (if any) were paid in full on August 20, 2021. The Registrant maintains the right under the Third Amended and Restated Credit Agreement to request from time to time that a foreign subsidiary of the Registrant be added to the Third Amended and Restated Credit Agreement as an additional borrower with the ability to request and receive loans from the Lenders. However, no more than five such requests may be made during the term of the Third Amended and Restated Credit Agreement.
As of August 20, 2021, prior to its amendment and restatement as described herein, the Existing Credit Agreement also provided for $500 million of availability.
Maturity Date
The Existing Credit Agreement had been due to mature on February 16, 2023. The Third Amended and Restated Credit Agreement extends the maturity date to August 20, 2026.
Use of Proceeds
The proceeds of the Third Amended and Restated Credit Agreement may be used to repay existing indebtedness and for working capital and other general corporate purposes, including capital expenditures and acquisitions. As of the close of business on August 20, 2021, the Registrant had no borrowings under the Third Amended and Restated Credit Agreement.
Letters of Credit
The Third Amended and Restated Credit Agreement provides that up to $75 million of the available commitments may be used for letters of credit for the benefit of the Registrant, representing the same maximum available letter of credit commitments under the Existing Credit Agreement. On August 20, 2021, the Registrant had no outstanding letters of credit issued under the Third Amended and Restated Credit Agreement.
Borrowing Options
The Third Amended and Restated Credit Agreement has several borrowing options: (i) ABR Borrowings, which may only be made in U.S. Dollars and bear interest at a rate determined by reference to the Alternate Base Rate described below; and (ii) Eurocurrency Borrowings, which may only be made in U.S. Dollars and bear interest at a rate determined by reference to the Adjusted LIBO Rate (as defined in the Third Amended and Restated Credit Agreement). A margin is added to each of the Alternate Base Rate and the Adjusted LIBO Rate, the amount of which is determined by the then current ratings by Standard & Poor’s Ratings Services (“S&P”), Moody’s Investors Service, Inc. (“Moody’s”) and/or Fitch, Inc. (“Fitch”) in respect of the Registrant’s senior unsecured long-term debt securities without third-party credit enhancement. The Alternate Base Rate is a floating per annum rate of interest equal to the highest of (a) the Overnight Bank Funding Rate plus 0.50%, (b) the Prime Rate of PNC Bank, National Association, and (c) the Daily LIBOR Rate plus 1.00% so long as the Daily LIBOR Rate is offered, ascertainable and not unlawful (as each such term is defined in the Third Amended and Restated Credit Agreement) and, in all cases, is subject to a zero percent (0%) floor. The Third Amended and Restated Credit Agreement contains customary LIBOR benchmark replacement language.
Swingline Loans
As Swingline Lender, PNC Bank, National Association may make swingline loans to the Registrant in an aggregate principal amount not to exceed $50 million. Swingline loans will bear interest at an interest rate agreed upon by the Registrant and PNC Bank, National Association.
Facility Fees
The Registrant agreed to pay (i) a facility fee on the commitments of the Lenders under the Third Amended and Restated Credit Agreement and (ii) a participation fee in connection with outstanding letters of credit (if any) under the Third Amended and Restated Credit Agreement, in each case, at a rate based on the then current S&P, Moody’s and/or Fitch ratings in respect of the Registrant’s senior unsecured long-term debt securities without third-party credit enhancement. As of August 20, 2021, each of the facility fee rate and the participation fee rate was 12.5 basis points. The Registrant is also obligated to pay under the Third Amended and Restated Credit Agreement a customary fronting fee of 0.125% of the face amount of each letter of credit issued from time to time under the Third Amended and Restated Credit Agreement, as well as usual and customary administrative and syndication fees.
Covenants; Events of Default
The terms of the Third Amended and Restated Credit Agreement provide for customary representations and warranties, affirmative covenants and negative covenants of and on the Registrant and its subsidiaries, subject to negotiated carve-outs, all as provided in the Third Amended and Restated Credit Agreement.
The Third Amended and Restated Credit Agreement requires that the ratio (the “interest coverage ratio”), for the Registrant and its subsidiaries on a consolidated basis, of (i) Consolidated EBITDA (as defined in the Third Amended and Restated Credit Agreement) for four consecutive fiscal quarters of the Registrant, taken as a single accounting period, to (ii) Consolidated Interest Expense (as defined in the Third Amended and Restated Credit Agreement) for such period, not be less than 3.25 to 1.00 at the end of any fiscal quarter of the Registrant. In addition, the Third Amended and Restated Credit Agreement requires that the ratio, for the Registrant and its subsidiaries on a consolidated basis, of (a) Consolidated Indebtedness (as defined in the Third Amended and Restated Credit Agreement) to (b) Consolidated Indebtedness (as defined in the Third Amended and Restated Credit Agreement) plus Consolidated Net Worth (as defined in the Third Amended and Restated Credit Agreement), not be greater than 60% at the end of any fiscal quarter of the Registrant.
The terms of the Third Amended and Restated Credit Agreement include customary events of default such as payment defaults; material inaccuracies in representations or warranties; covenant defaults; bankruptcy, insolvency or occurrence of similar events; cross-defaults to other material indebtedness; uninsured material judgments; the occurrence of a defined change of control of Registrant or a foreign subsidiary of the Registrant which becomes a borrower under the Third Amended and Restated Credit Agreement; material ERISA events; and any material provision of any Loan Document (as defined in the Third Amended and Restated Credit Agreement) ceases to be enforceable. Upon the occurrence and during the continuation of an event of default, the Lenders may, among other things, terminate their commitments under the Third Amended and Restated Credit Agreement and declare any of the then outstanding loans or letter of credit obligations to be due and payable immediately.
The foregoing description of the Third Amended and Restated Credit Agreement is qualified in its entirety by reference to the full and complete terms of the Third Amended and Restated Credit Agreement, which is included as Exhibit 4.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
Please see the description in “Item 1.01. Entry into a Material Definitive Agreement.” of this Current Report on Form 8-K, related to the Third Amended and Restated Credit Agreement entered into on August 20, 2021, which description is incorporated herein by reference.
Item 9.01. | Financial Statements and Exhibits. |
The following exhibits are included with this Current Report on Form 8-K:
Exhibit No. | | Description |
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4.1 | | Third Amended and Restated Credit Agreement, dated as of August 20, 2021, among Worthington Industries, Inc., as a Borrower; PNC Bank, National Association, as a Lender, the Swingline Lender, an Issuing Bank and Administrative Agent; JPMorgan Chase Bank, N.A. and Bank of America, N.A., as Lenders and Syndication Agents; U.S. Bank National Association, Wells Fargo Bank, National Association, The Huntington National Bank, Fifth Third Bank, National Association, The Northern Trust Company and BMO Harris Bank, N.A., as Lenders; and Truist Bank (as successor to Branch Banking and Trust Company), as a Departing Lender; with U.S. Bank National Association, Wells Fargo Bank, National Association and The Huntington National Bank serving as Co-Documentation Agents; and JPMorgan Chase Bank, N.A., PNC Capital Markets LLC and Bank of America, N.A. serving as Joint Bookrunners and Joint Lead Arrangers |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | WORTHINGTON INDUSTRIES, INC. |
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Date: August 25, 2021 | | By: | | /s/Patrick J. Kennedy |
| | | | Patrick J. Kennedy, Vice President, General Counsel & Secretary |
