Section 1 — Registrant’s Business and Operations
Item 1.01. Entry into a Material Definitive Agreement.
On June 18, 2019 (the “Effective Date”), Avantor, Inc.’s (the “Company”) wholly owned subsidiary, Avantor Funding, Inc. (“Avantor Funding”), entered into Amendment No. 2 (the “Amendment”) to Credit Agreement, dated as of November 21, 2017 (as amended by Amendment No. 1 to Credit Agreement, dated as of November 27, 2018, and as further amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Credit Agreement”), among Vail Holdco Sub LLC, Avantor Funding, each of the Guarantors, Goldman Sachs Bank USA, as administrative agent and collateral agent (the “Administrative Agent”), Swing Line Lender and an L/C Issuer, the lenders party thereto (the “Lenders”) and Goldman Sachs Lending Partners LLC, as the Additional InitialB-2 Euro Term Lender and the Additional InitialB-2 Dollar Term Lender.
Pursuant to the Amendment, Avantor Funding obtained $809.8 million of senior secured U.S. dollar term loans (the “Amendment No. 2 Dollar Term Loans”) and €417.5 million of senior secured Euro term loans (the “Amendment No. 2 Euro Term Loans” and, together with the Amendment No. 2 Dollar Term Loans, the “Amendment No. 2 Term Loans”). The Amendment No. 2 Dollar Term Loans bear interest initially at a rate of LIBOR plus a spread of 3.00% per annum (or the alternate base rate plus 2.00% per annum) and the Amendment No. 2 Euro Term Loans bear interest initially at a rate of EURIBOR plus a spread of 3.25% per annum. In addition, both the Amendment No. 2 Dollar Term Loans and the Amendment No. 2 Euro Term Loans are each subject to a 25 basis point step-down if Avantor Funding achieves a Consolidated First Lien Net Leverage Ratio (as defined in the Credit Agreement) of less than 2.30:1.00. The Amendment No. 2 Terms Loans replaced and refinanced Avantor Funding’s existing senior secured U.S. dollar term loans, which had an interest rate of LIBOR plus a spread of 3.75% per annum (or the alternate base rate plus 2.75% per annum), and senior secured Euro term loans, which had an interest rate of EURIBOR plus a spread of 3.75% per annum, that were scheduled to mature on November 21, 2024.
The final stated maturity of the Amendment No. 2 Term Loans is November 21, 2024. In addition, the Amendment provides that in the event Avantor Funding prepays, replaces or refinances all or a portion of the Amendment No. 2 Term Loans at any time prior to the six month anniversary of the Amendment No. 2 Effective Date with any indebtedness under credit facilities incurred primarily for the purpose of repaying, replacing or refinancing the Amendment No. 2 Term Loans at an effective yield that is less than the effective yield of the Amendment No. 2 Term Loans (excluding any indebtedness incurred in connection with a change of control), a prepayment premium equal to 1% of the principal amount of Amendment No. 2 Term Loans being prepaid or 1% of the principal amount of the Amendment No. 2 Term Loans outstanding immediately prior to such amendment will be imposed on Avantor Funding.
The Amendment No. 2 Term Loans are guaranteed by the same subsidiaries of the Company (the “Guarantors”) that guarantee the existing credit facilities under the Credit Agreement. The Amendment No. 2 Term Loans and the guarantees thereof are secured by the same collateral of Avantor Funding and the Guarantors that secures Avantor Funding’s obligations under the Credit Agreement on a pari passu basis.
In addition, the Administrative Agent, certain of the lenders and/or their respective affiliates have provided the Company and its affiliates with financial advisory, commercial banking and investment banking services for which they received customary fees and expenses. The foregoing is a summary of the material terms of the Amendment, does not purport to be complete, and is qualified in its entirety by reference to the Amendment, a copy of which is attached as Exhibit 10.1.
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