Item 1.01 Entry into a Material Definitive Agreement.
Amendment to Credit Facility
On February 20, 2025, REV Group, Inc. (the “Company”) entered into an Amendment No. 3 (the “Amendment”) to its Credit Agreement, dated as of April 13, 2021, by and among the Company, as Borrower, certain subsidiaries of the Company, as other Loan Parties, the Lenders party thereto and JPMorgan Chase Bank N.A., as Administrative Agent (the “Existing Credit Agreement”; the Existing Credit Agreement, as amended by the Amendment No. 1 to Credit Agreement dated November 1, 2022, Amendment No. 2 to Credit Agreement dated February 7, 2024 and the Amendment, the “Credit Agreement”).
The Amendment modified the Existing Credit Agreement to, among other things, extend the maturity of the senior secured asset-based revolving credit facility (the “Credit Facility”) to five years after the effective date of the Amendment, decrease the aggregate commitments for revolving loans and letters of credit from $550.0 million to $450.0 million, and increase the sublimit for swingline loans from $30.0 million to $45.0 million. Pursuant to the Amendment, the interest rates applicable to all revolving loans under the Credit Facility were revised so that the applicable margin adjustment is based on the calculation of average quarterly availability in relation to the total revolving loan commitment.
The Amendment revised the borrowing base so that (i) its calculation is comprised of a larger percentage of eligible receivables than in the Existing Credit Agreement and is subject to a dilution reserve as specified in the Credit Agreement and (ii) it does not factor eligible equipment or eligible real property into its calculation. Real property assets of the Company were released as collateral in connection with the Amendment.
The Amendment modified the minimum fixed charge coverage ratio covenant that the Company must comply with during certain periods to 1.00 to 1.00. Further, the compliance periods for when the Company is required to (i) maintain the revised minimum fixed charge coverage ratio of 1.00 to 1.00 and (ii) provide certain financial reports to the Administrative Agent were each modified by the Amendment.
The Amendment also modified certain dollar thresholds applicable to customary affirmative and negative covenants in the Credit Agreement.
The Existing Credit Agreement was also modified by the Amendment so that, subject to certain conditions and limitations set forth in the Credit Agreement, the Company is permitted to enter into an additional secured term loan credit facility with financial institutions acceptable to the Administrative Agent so long as, among other conditions, (i) immediately after giving effect to such secured term loan credit facility, the Company maintains a (x) secured net leverage ratio not in excess of 3.00 to 1.00 and (y) total net leverage ratio not in excess of 3.50 to 1.00 and (ii) the debt incurred by the Company pursuant to such secured term loan credit facility is subordinated to the Company’s debt under the Credit Facility or subject to an intercreditor agreement acceptable to the Administrative Agent.
The foregoing description is qualified in its entirety by reference to the Amendment, which is filed as Exhibit 10.1 hereto and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
