ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On April 28, 2021 (the “Closing Date”), Vontier Corporation, a Delaware corporation (“Vontier”), and certain of its subsidiaries, entered into an amendment and restatement (the “A&R Credit Agreement”) of the credit agreement dated September 29, 2020 (the “Existing Credit Agreement”) among Vontier and a syndicate of lenders.
The Existing Credit Agreement consisted of a three-year, $800 million senior unsecured delayed draw term loan facility, a two-year, $1 billion senior unsecured delayed draw term loan facility and a three-year, $750 million senior unsecured multi-currency revolving credit facility, including a $25 million sublimit for swingline loans and a $75 million sublimit for the issuance of letters of credit. Two of Vontier’s wholly-owned subsidiaries (the “Guarantors”) were guarantors under the credit facilities subject to the Existing Credit Agreement.
The A&R Credit Agreement consists of a three-and-one-half-year, $400 million senior unsecured term loan facility (the “Term Loan Facility”), which will be fully drawn on the Closing Date, and a five-year, $750 million senior unsecured, multi-currency revolving credit facility, including a $25 million sublimit for swingline loans and a $75 million sublimit for the issuance of letters of credit (the “Revolving Credit Facility,” together with the Term Loan Facility, the “Credit Facilities”).
Borrowings under the Credit Facilities bear interest as follows: (A) with respect to the Revolving Credit Facility (1) Eurocurrency Rate Loans (as defined in the A&R Credit Agreement) bear interest at a variable rate equal to the London inter-bank offered rate plus a per annum margin of between 100 basis points and 155 basis points, depending on Vontier’s long-term debt credit rating; and (2) Base Rate Loans (as defined in the A&R Credit Agreement) bear interest at a variable rate equal to (a) the highest of (i) the Federal Funds Rate (as published by the Federal Reserve Bank of New York from time to time) plus 1/2 of 1%, (ii) Bank of America’s “prime rate” as publicly announced from time to time and (iii) the Eurocurrency Rate (as defined in the A&R Credit Agreement) plus 1%, plus (b) a per annum margin of between zero basis points and 55 basis points, depending on Vontier’s long-term debt credit rating; and (B) with respect to the Term Loan Facility (1) Eurocurrency Rate Loans (as defined in the A&R Credit Agreement) bear interest at a variable rate equal to the London inter-bank offered rate plus a per annum margin of between 87.5 basis points and 150 basis points, depending on Vontier’s long-term debt credit rating; and (2) Base Rate Loans (as defined in the A&R Credit Agreement) bear interest at a variable rate equal to (a) the highest of (i) the Federal Funds Rate (as published by the Federal Reserve Bank of New York from time to time) plus 1/2 of 1%, (ii) Bank of America’s “prime rate” as publicly announced from time to time and (iii) the Eurocurrency Rate (as defined in the A&R Credit Agreement) plus 1%, plus (b) a per annum margin of between zero basis points and 50 basis points, depending on Vontier’s long-term debt credit rating In no event will Eurocurrency Rate Loans bear interest at a rate lower than 0% nor Base Rate Loans bear interest at a rate lower than 1%. Commencing on the Closing Date, Vontier will also be required to pay a per annum facility fee of between 12.5 basis points and 32.5 basis points, depending on Vontier’s long-term debt credit rating based on the aggregate commitments under the Revolving Credit Facility, regardless of usage.
The A&R Credit Agreement also made certain other changes to the Existing Credit Agreement to address the discontinuation of LIBOR and its impact on U.S. dollar and multicurrency loans, as well as certain other immaterial changes. The Guarantors entered into an amended and restated guaranty as Guarantors under the Credit Facilities subject to the A&R Credit Agreement.
Except as disclosed in this Current Report on Form 8-K, all other material provisions of the Existing Credit Agreement remain unchanged.
The above description of the A&R Credit Agreement is qualified in its entirety by reference to the A&R Credit Agreement. The A&R Credit Agreement is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
| ITEM 2.03 | CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT |
The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
