1 Month Bloomberg Short-Term Bank Yield Index – A proprietary credit sensitive interest rate index calculated daily and published at 7:00am (EDT) on each US business day.
Once selected prior to closing the Modification, the Replacement Interest Rate Index will remain in place for the life of the Commitment. Below is a comparison of the proposed Replacement Interest Rate Indexes to the current 1 Month LIBOR Rate Index.
Published as of July 29, 2022
1 Month LIBOR Rate = 2.362290%
1 Month CME Term SOFR Rate = 2.284710% + .11448% = 2.399190%
1 Month BSBY = 2.301420%
The Interest Rate under the Commitment shall continue to be subject to a Pricing Matrix including an Applicable Margin that will be added to the Replacement Interest Rate Index. The Interest Rate will be equal to the Replacement Interest Rate Index selected plus an Applicable Margin of 100 basis points, payable quarterly, as long as the Leverage Ratio, as defined in the Loan Agreement, is less than 1:1. If the Leverage Ratio is over 1:1 but not greater than 2:1, the interest rate will be equal to the Replacement Interest Rate Index selected plus an Applicable Margin of 125 basis points, payable quarterly.
Collateral: | The Commitment will remain unsecured. |
Regarding Section 7.2 (Mortgages, Liens, Etc.) of the Loan Agreement, there shall be no permitted liens for any amounts placed upon Borrower’s unencumbered accounts receivable, inventory, and fixed assets (property, plant, and equipment) except in the case of chassis financing provided by either dealers or the chassis manufacturers. All other provisions of Section 7.2 of the Loan Agreement shall remain in full force.
Asset Coverage
Test: | Under Section 6: Affirmative Covenants of the Borrower in the Loan Agreement, a new Asset Coverage Test shall be required. The Asset Coverage Test shall be applicable at all times and tested on a quarterly basis in the Non-Default Certificate. |
Borrower’s Asset Coverage Test shall be calculated by adding seventy-five percent (75%) of the book value of all unencumbered accounts receivable (net of allowances for credit losses) and fifty percent (50%) of the book value of all unencumbered inventory and dividing said sum by the outstanding principal balance on the Commitment, minus a Capital Expenditure Exclusion of Thirty-Five Million Dollars ($35,000,000.00). This coverage calculation shall be 2.00 times or greater at all times. As of June 30, 2022, the preliminary Asset Coverage Test value is 21.3 times.
Maturity Date: | The Maturity Date will remain May 31, 2027. |
Closing Costs: | Borrower shall reimburse the Bank for all filing fees, legal fees, documentation preparation expenses, lien searches and recording costs incurred by the Bank on behalf of the Borrower relative to the Modification, regardless of whether the Modification is actually closed. All loan documentation shall be in form and content satisfactory to the Bank and its legal counsel. |
