Item 1.01 Entry into a Material Definitive Agreement.
On April 16, 2021, Ecolab Inc. (“Ecolab”) entered into a third amended and restated $2.0 billion unsecured 5-year revolving credit facility that matures in April 2026 (the “5-Year Facility”), among the lenders party thereto (the “Banks”), the issuing lenders party thereto, Bank of America, N.A., as administrative agent and swing line bank, and Citibank, N.A., JPMorgan Chase Bank, N.A. and MUFG Bank, Ltd., as co-syndication agents. The 5-Year Facility amends and restates Ecolab’s existing $2.0 billion unsecured 5-year revolving multicurrency credit facility maturing in November 2022 by, among other things, amending certain provisions thereof and extending the maturity from November 2022 to April 2026.
The 5-Year Facility will be used for general corporate purposes, including, without limitation, the repurchase of shares of capital stock of Ecolab, the repayment of other indebtedness and acquisitions.
Borrowings under the 5-Year Facility bear interest (i) for U.S. Dollar-denominated loans, at Ecolab’s option, (x) the base rate (which is equal to the highest of (a) the Bank of America, N.A. prime rate, (b) the federal funds rate plus 0.50% and (c) one-month LIBOR plus 1.0%) plus an applicable margin or (y) LIBOR for an interest period selected by Ecolab plus an applicable margin, (ii) for Euro-denominated loans, EURIBOR for an interest period selected by Ecolab plus an applicable margin, (iii) for Canadian Dollar-denominated loans, CDOR for an interest period selected by Ecolab plus an applicable margin, (iv) for Yen-denominated loans, TIBOR for an interest period selected by Ecolab plus an applicable margin and (v) for Sterling-denominated loans, overnight SONIA plus an applicable margin. The interest periods available to Ecolab for loans denominated in U.S. Dollars, Euros, Canadian Dollars and Yen are one, two (subject to availability), three or six months (subject to availability), or, if available to all of the Banks, twelve months.
The 5-Year Facility includes a $100 million letter of credit subfacility and a $75 million swing line loan subfacility. In connection with the 5-Year Facility, Ecolab must pay (i) a facility fee at a rate per annum which may range from 0.05% to 0.125% of the actual daily commitment of each lender and (ii) a fee on each issued and outstanding letter of credit at a rate per annum which may range from 0.70% to 1.125% of the daily undrawn amount of each letter of credit. The applicable rates for these fees will be determined based on Ecolab’s credit rating, as described in the 5-Year Facility.
The 5-Year Facility contains a financial covenant that requires Ecolab to maintain a minimum interest expense coverage ratio, measured as of the end of each four quarter period. The 5-Year Facility also contains customary conditions to funding, events of default, affirmative covenants and negative covenants, including restrictions on liens and subsidiary indebtedness.
In the ordinary course of their respective businesses, one or more of the lenders under the 5-Year Facility, or their affiliates, have or may have various relationships with Ecolab and its subsidiaries involving the provision of financial services, including cash management, investment banking and trust services, for which they received, or will receive, customary fees and expenses.
The foregoing description is not intended to be complete and is qualified in its entirety by reference to the full text of the 5-Year Facility, which is incorporated herein by reference and attached as Exhibit 10.1 hereto.
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 above under Item 1.01 is hereby incorporated by reference into this Item 2.03.
