Item 1.01.Entry Into a Material Definitive Agreement.
Amendment to Credit Agreement
On March 31, 2020, Matson, Inc. (“Matson” or the “Company”) entered into a First Amendment to Amended and Restated Credit Agreement (the “Credit Agreement Amendment”) to its Amended and Restated Credit Agreement dated as of June 29, 2017 (the “Existing Credit Agreement”; the Existing Credit Agreement, as amended by the Credit Agreement Amendment, the “Credit Agreement”) with Bank of America, N.A. as Agent, Swing Line Lender and L/C Issuer, the lenders party thereto, and First Hawaiian Bank, as L/C Issuer.
The Credit Agreement Amendment provides for amendments to certain covenants and other terms, including (i) increasing the permitted consolidated leverage ratio from March 31, 2020 to December 30, 2021, amending the pricing grid to provide for pricing ranging from, at the Company’s election, LIBOR plus a margin between 1.75% and 3.50% depending on the Company’s consolidated net leverage ratio, or base rate plus a margin between 0.75% and 2.50% depending on the Company’s consolidated net leverage ratio; (ii) providing for additional limitations on stock redemptions and repurchases, sale leaseback transactions and asset sales during the period from March 31, 2020 through and including December 30, 2021; and (iii) providing for additional limitations on incurrence of priority debt through December 21, 2027. In addition, the Credit Agreement Amendment adds a “most favored lender” provision for the benefit of the lenders with respect to the Company’s private Note Purchase Agreements (as defined below). Customary fees were payable in connection with the closing of the Credit Agreement Amendment.
The foregoing description is qualified in its entirety by the terms and conditions set forth in the Credit Agreement Amendment, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Amendments to Existing Private Placement Facilities
On March 31, 2020, Matson and the holders of notes party thereto entered into amendments (collectively, the “2020 NPA Amendments”) to each of (1) the Third Amended and Restated Note Purchase Agreement and Private Shelf Agreement dated as of September 14, 2016, among Matson and the holders of the notes issued thereunder, (2) the Note Purchase Agreement dated November 5, 2013 among Matson and the holders of the notes issued thereunder, (3) the Note Purchase Agreement dated July 30, 2015 among Matson and the holders of the notes issued thereunder, and (4) the Note Purchase Agreement dated December 21, 2016 among Matson and the holders of the notes issued thereunder, in each case as amended prior to such date (the “Existing Note Purchase Agreements,” and the Existing Note Purchase Agreements, as so amended, the “Note Purchase Agreements”).
The 2020 NPA Amendments provide for amendments to certain covenants and other terms, including (i) increasing the permitted consolidated leverage ratio from March 31, 2020 to December 30, 2021; (ii) providing for additional quarterly interest enhancement payments based on the Company’s consolidated leverage ratio from the fiscal quarter ending March 31, 2020 through and including the fiscal quarter ending December 31, 2021; (iii) providing for an additional 25 basis points of interest on the notes commencing on January 1, 2022 (subject to termination of such incremental interest upon the Company meeting a consolidated leverage ratio of less than 3:00 to 1:00 for two consecutive fiscal quarters); (iv) providing for additional fee payments to be made for the fiscal quarters ending June 30, 2021 and September 30, 2021; (v) providing for prepayment at par at the option of the holders with proceeds of certain Title XI debt and dispositions of capital assets; (vi) providing for additional limitations on stock redemptions and repurchases, sale leaseback transactions and asset sales during the period from March 31, 2020 through and including December 30, 2021; and (vii) providing for additional limitations on incurrence of priority debt through December 21, 2027. In addition, the 2020 NPA Amendments add a “most favored lender” provision for the benefit of the noteholders with respect to the other Note Purchase Agreements and the Credit Agreement. Customary fees were payable in connection with the closing of the 2020 NPA Amendments.
The foregoing description is qualified in its entirety by the terms and conditions set forth in the 2020 NPA Amendments, copies of which are filed as Exhibits 10.2 to 10.5 to this Current Report on Form 8-K and are incorporated herein by reference.
