| Item 1.01 | Entry into a Material Definitive Agreement. |
On November 19, 2020, Allison Transmission Holdings, Inc. (the “Company”), Allison Transmission, Inc., a wholly owned subsidiary of the Company (the “Issuer”), the several banks and other financial institutions party thereto, as 2020 Revolving Credit Lenders and Citibank, N.A., as Administrative Agent (the “Administrative Agent”) entered into Amendment No. 2 to Credit Agreement (the “Amendment”), which amended that certain Second Amended and Restated Credit Agreement, dated as of March 29, 2019, by and among the Company, the Issuer, the lenders from time to time party thereto, the Administrative Agent and Citicorp North America, Inc., as collateral agent (as amended, amended and restated, supplemented or otherwise modified from time to time, including by the Amendment, the “Credit Agreement”). The Credit Agreement and the Loan Documents (as defined in the Credit Agreement) govern the Issuer’s senior secured credit facilities.
Pursuant to the Amendment, among other things, the Issuer increased the commitments under its revolving credit facility from $600 million to $650 million and extended the maturity date thereof to September 2025.
The foregoing description does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Amendment filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Certain of the information required by this item is included in Item 2.03 below and is 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. |
On November 19, 2020, the Issuer issued $1 billion in aggregate principal amount of 3.750% Senior Notes due 2031 (the “Notes”). The Notes were issued pursuant to an indenture, dated as of November 19, 2020, between the Issuer and Wilmington Trust, National Association, as Trustee (the “Indenture”). The Notes pay interest semi-annually in arrears. The Notes were offered in a private placement exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). The net proceeds from the offering, together with cash on hand, were used to redeem all of the Issuer’s outstanding 5.000% Senior Notes due 2024 and to pay related fees and expenses.
Optional Redemption Provisions and Change of Control Repurchase Right
At any time prior to January 30, 2026, upon not less than 10 nor more than 60 days’ notice, the Notes will be redeemable at the Issuer’s option, in whole at any time or in part from time to time, at a price equal to 100.0% of the principal amount of the Notes redeemed, plus a make-whole premium as set forth in the Indenture, plus accrued and unpaid interest, if any, to (but not including) the applicable redemption date. Beginning January 30, 2026, the Issuer may redeem the Notes, at its option, in whole at any time or in part from time to time, subject to the payment of a redemption price that includes a call premium that varies (from 1.875% to 0%) depending on the year of redemption, together with accrued and unpaid interest, if any, to (but not including) the applicable redemption date.
In addition, at any time prior to January 30, 2024, the Issuer may redeem up to 40.0% of the aggregate principal amount of the Notes at a redemption price equal to 103.750% of the principal amount thereof, together with accrued and unpaid interest, if any, to (but not including) the applicable redemption date, with the net cash proceeds of sales of one or more equity offerings by the Issuer or any direct or indirect parent of the Issuer.
