Item 1.01 Entry into a Material Definitive Agreement.
On May 22, 2019, certain subsidiaries of Cabot Corporation (the “Company”) entered into a €300 million unsecured revolving credit agreement (the “Credit Agreement”), guaranteed by the Company, with Wells Fargo Bank, National Association, as Administrative Agent and Swingline Lender, Wells Fargo Securities, LLC, as Sole Lead Arranger and Sole Bookrunner, PNC Bank, National Association and U.S. Bank National Association, as Co-Syndication Agents, Mizuho Bank, Ltd., as Documentation Agent, and the other lenders party thereto. Borrowings under the Credit Agreement may be made in multiple currencies and used for the repatriation of earnings of the Company’s foreign subsidiaries to the United States, the repayment of indebtedness of the Company’s foreign subsidiaries owing to the Company or any of its subsidiaries and for working capital and general corporate purposes. The facility matures on May 22, 2024 or earlier upon maturity of the Company’s $1 billion unsecured revolving credit agreement (the “Existing Credit Agreement”) with JPMorgan Chase Bank, N.A., as Administrative Agent, Citibank, N.A., as Syndication Agent, and the other lenders party thereto.
At the Company’s election, loans will bear interest at LIBOR plus an applicable margin of between 0.68% and 1.20%, depending on the Company’s credit ratings, or at the prime rate, and at similar applicable rates for foreign currency borrowings.
The Credit Agreement requires the Company to comply on a quarterly basis with a leverage test requiring consolidated total debt not to exceed consolidated EBITDA for the four quarters then ending by more than 3.50 to 1.00 (with an increase to 4.00 to 1.00 at the election of the Company for the four quarters following a material acquisition). Consistent with the Existing Credit Agreement, the Credit Agreement also includes negative covenants limiting, subject to exceptions, the Company’s ability to incur liens and subsidiary indebtedness, among other customary restrictions, as well as customary representations and warranties, affirmative covenants and events of default, including cross defaults and a change of control default.
This description is a summary and is qualified in its entirety by reference to the Credit Agreement, which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated into this Item 1.01 by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The description of the Credit Agreement set forth under “Item 1.01 Entry into a Material Definitive Agreement” is incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
