| Item 1.01. | Entry into a Material Definitive Agreement |
On May 28, 2019, Marcus & Millichap, Inc. (the “Company”) entered into an Amended and Restated Credit Agreement (the “Amended Credit Agreement”) with Wells Fargo Bank, National Association (“Bank”), which amends and restates the Credit Agreement dated June 1, 2014 between the Company and the Bank, as amended. The Amended Credit Agreement provides for a $60 million principal amount senior secured revolving credit facility that is guaranteed by all the Company’s domestic subsidiaries (the “Credit Facility”). The Credit Facility matures on June 1, 2022. The Company may borrow, repay and reborrow amounts under the Credit Facility until its maturity date, at which time all amounts outstanding under the Credit Facility must be repaid in full.
The Amended Credit Agreement is intended to provide for future liquidity needs, if needed. The Company has no current plans to drawn down any commitments under the Credit Facility. The Credit Facility includes a $10 million sublimit for the issuance of standby letters of credit.
Borrowings under the Credit Facility will bear interest, at the Company’s option, at either (i) a fluctuating rate per annum 2.00% below the Base Rate (defined as the highest of (a) the Wells Fargo prime rate,(b) one-month LIBOR plus 1.5%, and (c) the Federal Funds Rate plus 1.5%), or (ii) at a fixed rate per annum determined by Bank to be 0.875% above LIBOR. An unused commitment fee of between 0.1% and 0.0% shall be payable quarterly in respect of the total amount of the unutilized Lenders’ commitments under the Credit Facility, based upon the amount of the unused line of credit left outstanding.
The Credit Facility contains customary covenants, including financial covenants (which require the Company, on a combined basis with its guarantors, to maintain (i) an EBITDAR Coverage Ratio (as defined in the Amended Credit Agreement) of not less than 1.25:1.0 as of each quarter end and (ii) total funded debt to EBITDA not greater than 2.0:1.0), reporting requirements and events of default. The Credit Facility is secured by all personal property assets of the Company, including pledges of all personal property assets of each subsidiary except to the extent such property constitutes the capital stock of a controlled foreign corporation (as defined in the Internal Revenue Code), in which case no such pledge shall be required.
The foregoing description of the Credit Facility is only a summary and is qualified in its entirety by reference to the Amended Credit Agreement, a copy of which is attached hereto as Exhibit 10.1.
| Item 2.03. | Submission of Matters to a Vote of Security Holders. |
Please see the discussion set forth in response to Item 1.01 above.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
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