Item 1.01. Entry into a Material Definitive Agreement.
On December 8, 2021, Palomar Holdings, Inc., a Delaware corporation (“Palomar”), entered into a Credit Agreement with the lenders party thereto from time to time and U.S. Bank National Association, as administrative agent (“Agent”) (the “Credit Agreement”). The Credit Agreement provides for a revolving credit facility of up to $100.0 million (the “Revolving Loan”). The maturity of the facility is December 8, 2026.
The Revolving Loan may be either a SOFR rate loan or a base rate loan, at Palomar’s discretion. The Revolving Loan may be prepaid in full or in part at any time with no prepayment premium and may be reduced in full or in part at any time upon prior notice to the Agent.
Interest on the Revolving Loan accrues on each SOFR rate loan at the applicable SOFR (as defined in the Credit Agreement) plus 1.75% and on each base rate loan at the applicable Alternate Base Rate (as defined in the Credit Agreement) plus (ii) 0.75%.
Palomar’s obligations under the Credit Agreement are guaranteed by certain of its material domestic subsidiaries pursuant to a Guaranty dated December 8, 2021, made in favor of Agent by Palomar Insurance Holdings, Inc., Palomar Specialty Insurance Company, Palomar Excess and Surplus Insurance Company and Palomar Insurance Agency, Inc. (the “Guaranty”). Palomar’s obligations under the Credit Agreement are unsecured with a negative pledge against all assets of Palomar and its subsidiaries as described in the Credit Agreement.
The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among other things, financial covenants, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness and dividends and other distributions.
The Credit Agreement provides for events of default customary for revolving loans of this type, including but not limited to non-payment, breaches or defaults in the performance of covenants, insolvency, bankruptcy and the occurrence of a material adverse effect on Palomar. During the existence of an event of default, all outstanding amounts of the Revolving Loan shall bear interest at a rate per annum equal to the rate otherwise applicable thereto plus 2.00%.
The foregoing description of the Credit Agreement and Guaranty are not intended to be complete and are qualified in their entirety by reference to the Credit Agreement and Guaranty, copies of which are filed as Exhibit 10.1 and Exhibit 10.2 hereto, respectively.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information in Item 1.01 above is incorporated by reference into this Item 2.03.
Item 9.01. Financial Statements and Exhibits
(d)Exhibits
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Exhibit No. | Description |
10.1 | Credit Agreement (Revolver), dated December 8, 2021, by and between Palomar Holdings, Inc., the lenders listed therein and U.S. Bank National Association. |
10.2 | Guaranty, dated December 8, 2021, made in favor of U.S. Bank National Association by Palomar Insurance Holdings, Inc., Palomar Specialty Insurance Company, Palomar Excess and Surplus Insurance Company and Palomar Insurance Agency, Inc. |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
