| ITEM 1.01 | ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT |
On December 15, 2021, Resolute Forest Products Inc. (the “Company”), and Resolute FP US Inc. (collectively with the Company, the “U.S. Borrowers”), Resolute FP Canada Inc. (the “Canadian Borrower” and together with the U.S. Borrowers, collectively, the “Borrowers”) entered into a Fourth Amendment to the Credit Agreement dated May 22, 2015, as amended by that certain Amendment No. 1 dated December 22, 2017, that certain Second Amendment, dated as of May 14, 2019, that certain Amendment No. 3, dated as of January 28, 2021, and as further amended, supplemented or otherwise modified from time to time (the “Amended Credit Agreement”), with certain lenders and Bank of America, N.A., as U.S. administrative agent and collateral agent (the “U.S. Agent”), and Bank of America, N.A. (through its Canada branch) as the Canadian administrative agent (together with the U.S. Agent, the “Agent”). The following summary of the amended material terms of the Amended Credit Agreement is qualified in its entirety by reference to the actual Amended Credit Agreement attached to this current report as Exhibit 10.1 and incorporated herein by reference.
General. The Amended Credit Agreement provides for an extension of the maturity date from May 14, 2024 to December 15, 2026, of the senior secured asset-based revolving credit facility with an aggregate lender commitment of up to $450 million at any time outstanding. The $450 million facility continues to include a $60 million swingline sub-facility and a $200 million letter of credit sub-facility. The facility features a $250 million tranche available to the U.S. Borrowers and the Canadian Borrower (the “Canadian Sub-facility”), and a $200 million tranche available solely to the U.S. Borrowers (the “U.S. Sub-facility”), in each case subject to the borrowing base availability of those Borrowers.
The Amended Credit Agreement also continues to provide for an uncommitted ability to increase the revolving credit facility by up to $500 million, subject to certain terms and conditions set forth in the Amended Credit Agreement.
Use of Proceeds. As of December 15, 2021, the Borrowers have no outstanding revolving loans and approximately $73 million outstanding undrawn letters of credit under the facility. In accordance with its stated purpose, the proceeds of the facility can be used by the Company for, among other things, financing the working capital needs and for general corporate purposes of the Borrowers and their subsidiaries.
Borrowing Base. Revolving loan (and letter of credit) availability under the facility is subject to a borrowing base, which remains substantially unchanged, except that the reserves under the Amended Credit Agreement that reduce the borrowing base, include a reserve commencing December 31, 2025, for the outstanding principal amount due under the 2026 Senior Notes issued on February 2, 2021.
Guarantees. The obligations of each of the U.S. Borrowers under the Amended Credit Agreement continue to be guaranteed by the other U.S. Borrower and certain U.S. subsidiaries of the Company, whom we refer to as “U.S. Guarantors”, and are secured by first priority liens on and security interests in accounts receivable, inventory and related assets of the U.S. Borrowers and the U.S. Guarantors. The obligations of the Canadian Borrower under the Amended Credit Agreement continue to be guaranteed by each of the other Borrowers, the U.S. Guarantors and certain Canadian subsidiaries of the Company, or the “Canadian Guarantors”, and, together with the U.S. Guarantors, the “Guarantors”, and continue to be secured by first priority liens on and security interests in accounts receivable, inventory and related assets of the Borrowers and the Guarantors.
