| Item 1.01 | Entry into a Material Definitive Agreement. |
On March 17, 2023, Crane Holdings, Co. (the “Company”) entered into a credit agreement (the “Credit Agreement”), by and among the Company, as borrower, the lenders and issuing banks party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent and the other agents and arrangers party thereto. The Credit Agreement provides for a senior secured term loan facility in an aggregate principal amount of $350 million (the “Term Facility”), which matures on March 17, 2026, and a senior secured revolving facility in an aggregate committed amount of $500 million (the “Revolving Facility”), which matures on March 17, 2028. Funding under the Credit Agreement is expected to be available prior to, or substantially concurrently with, consummation of the Company’s previously announced plan to spin-off its Aerospace & Electronics, Process Flow Technologies and Engineered Materials segments to the Company’s stockholders (the “Spin-Off”), as more fully described in the information statement attached as Exhibit 99.1 to the Crane Company Form 8-K filed with the U.S. Securities and Exchange Commission on March 8, 2023.
Borrowings made in U.S. dollars shall bear interest based, at the Company’s option, (i) on an alternate base rate plus a margin as described below, or (ii) on an adjusted term SOFR rate plus a credit spread adjustment of 0.10% plus a margin as described below. Borrowings made in Euros shall bear interest based on an adjusted EURIBOR rate plus a margin as described below. Borrowings made in Canadian Dollars shall bear interest based on an adjusted CDO Rate plus a margin as described below. The margin for each of the foregoing rates (other than the alternate base rate) shall range from 1.50% to 2.25% based on the lower of a level corresponding to (a) ratings of the Company’s long-term debt by Standard & Poor’s Ratings Services or Moody’s Investors Service, Inc. and (b) the Company’s consolidated total net leverage ratio (the “Pricing Level”). The margin for alternate base rate borrowings shall range from 0.50% to 1.25% depending on the Pricing Level. A commitment fee on the daily unused portion of the commitments under the Revolving Facility accrues at a rate per annum ranging from 0.20% to 0.35% depending on the Pricing Level.
Upon funding under the Credit Agreement, the obligations of the Company thereunder will be guaranteed by certain of the Company’s wholly-owned domestic subsidiaries and secured by a lien on substantially all of the tangible and intangible assets of the Company and such subsidiaries, in each case, subject to materiality thresholds and other exceptions and exclusions customary for credit facilities of this type.
Borrowings under the Term Facility are prepayable without premium or penalty, subject to customary reimbursement of breakage costs. The Company will be required to repay borrowings under the Term Facility on the last day of each fiscal quarter, commencing with the last day of the first full fiscal quarter ending after the date on which all of the conditions for the lenders to make loans are complete (the “Availability Date”), in an amount equal to (i) with respect to the last day of each of the first through fourth full fiscal quarters ending after the Availability Date, 0.625% of the aggregate principal amount of the tranche a term loans made on the Availability Date and (ii) thereafter, 1.25% of the aggregate principal amount of the tranche a term loans made on the Availability Date. The Revolving Facility allows the Company to borrow, repay and re-borrow funds from time to time prior to the maturity of the Revolving Facility without any penalty or premium, subject to customary borrowing conditions for facilities of this type and the reimbursement of breakage costs.
The Credit Agreement contains representations and warranties and affirmative and negative covenants customary for credit facilities of this type, including limitations on the Company and its subsidiaries with respect to indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of all or substantially all assets, transactions with affiliates and entry into hedging arrangements. The Credit Agreement also requires the Company to maintain, as of the last day of each fiscal quarter, (i) a consolidated total net leverage ratio of no greater than 3.50 to 1.00, which level may, at the Company’s option, be increased by 0.50 upon the consummation of certain permitted acquisitions for certain periods and (ii) a consolidated interest coverage ratio of no greater than 3.00 to 1.00. The Credit Agreement also includes customary events of default, including failure to pay principal, interest or fees when due, failure to comply with covenants, any representation or warranty made by the Company or any of its material subsidiaries being false in any material respect, default under certain other material indebtedness, certain insolvency or receivership events affecting the Company or any of its material subsidiaries, certain ERISA events, material judgments and a change in control, in each case, subject to cure periods and thresholds where customary.
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