| Item 1.01 | Entry into a Material Definitive Agreement. |
Indenture and Notes
On March 29, 2021, TriMas Corporation (the “Company”) completed an offering of $400.0 million aggregate principal amount of its 4.125% Senior Notes due 2029 (the “Notes”) in a private transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). The Notes have not been, and will not be, registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act. The Notes were issued pursuant to an Indenture, dated as of March 29, 2021 (the “Indenture”), among the Company, the subsidiaries of the Company named therein, as guarantors, and Wells Fargo Bank, National Association, as trustee.
The Notes will mature on April 15, 2029. Interest on the Notes will accrue from March 29, 2021, at a rate of 4.125% per annum, payable semi-annually in cash in arrears on April 15 and October 15 of each year, commencing October 15, 2021. The Notes are guaranteed (the “Guarantees”) on a senior unsecured basis by each of the Company’s existing and future direct and indirect subsidiaries that is, or will be, a borrower or guarantor of the U.S. Obligations (as defined in the Indenture) under the Credit Agreement (as defined below) (collectively, the “Guarantors”).
The Notes and the Guarantees are the Company’s and the Guarantors’ unsecured senior obligations. The Notes and the Guarantees rank pari passu in right of payment with all of the Company’s and the Guarantors’ existing and future senior debt and senior in right of payment to all of the Company’s and the Guarantors’ existing and future subordinated debt. The Notes and Guarantees are effectively subordinated to all of the Company’s and the Guarantors’ existing and future secured debt, including their respective obligations under the Credit Agreement, to the extent of the value of the assets securing such debt. The Notes are structurally subordinated to all liabilities (other than liabilities owed to the Company or a Guarantor) of the Company’s existing and future subsidiaries that do not guarantee the Notes, including all foreign currency loans under the Credit Agreement.
The Company may redeem some or all of the Notes before April 15, 2024 at a redemption price equal to 100% of the principal amount thereof plus a “make whole” premium, plus accrued and unpaid interest, if any, to, but not including, the redemption date. On or after April 15, 2024, the Notes will be redeemable, at the Company’s option, in whole or in part, on the redemption dates and at the redemption prices specified in the Indenture. In addition, the Company may redeem up to 40% of the aggregate principal amount of the Notes before April 15, 2024 with amounts equal to the net cash proceeds from certain equity offerings at a redemption price of 104.125% of the principal amount plus accrued and unpaid interest, if any, to, but not including, the redemption date.
The terms of the Notes are governed by the Indenture. The Indenture contains certain covenants that, subject to certain exceptions and qualifications, limit the Company’s ability and the ability of its restricted subsidiaries to, among other things: incur additional debt; pay dividends, redeem stock or make other distributions; enter into certain types of transactions with affiliates; incur liens on assets; make certain investments; agree to certain restrictions on the ability of restricted subsidiaries to make payments to the Company; and, merge, consolidate, transfer or dispose of substantially all assets. Furthermore, in the event of a Change of Control (as defined in the Indenture), the Company must offer to repurchase the Notes at 101% of the aggregate principal amount of the Notes, plus accrued and unpaid interest, if any, to, but not including, the date of purchase. The Company will also be required to offer to repurchase the Notes in connection with certain asset sales. The Indenture also provides for customary events of default.
The Company will use a portion of the net proceeds of the offering to redeem all of the Company’s outstanding 4.875% Senior Notes due 2025. The remaining net proceeds will be used for general corporate purposes, which could include the temporary reduction of amounts outstanding under the senior secured revolving credit facility pursuant to the Credit Agreement.
The foregoing descriptions of the Notes and the Indenture do not purport to be complete and are qualified in their entirety by reference to the full text of the Indenture (including the Form of Note), which is filed as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Amendment to Existing Credit Agreement
On March 29, 2021, TriMas Company LLC entered into a replacement facility amendment (the “Amendment”) to the Credit Agreement, dated as of October 16, 2013 (as previously amended, the “Existing Credit Agreement” and, as amended by the Amendment, the “Credit Agreement”), among the Company, TriMas Company LLC, the Foreign Subsidiary Borrowers party thereto, the lenders from time to time party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent, and the other agents party thereto.
Pursuant to the Amendment, the $300.0 million revolving credit facility will permit borrowings denominated in specific foreign currencies, subject to a $125.0 million (equivalent) sublimit, and will mature on March 29, 2026. The revolving loans under the Credit Agreement will bear interest at the London Interbank Offered Rate (“LIBOR”) plus 1.500% (subject to step-ups up to LIBOR plus 1.625%, 1.750% or 2.000% or step-down down to LIBOR plus 1.375%, based on the leverage ratio).
