| Item 1.01 | Entry into a Material Definitive Agreement. |
On September 12, 2018, Stanley Black & Decker, Inc., a Connecticut corporation (the “Company”), entered intoa 364-Day Credit Agreement (the “364 DayCredit Agreement”) with each of the initial lenders named therein, Citibank, N.A., as administrative agent, Citibank, N.A., JPMorgan Chase Bank, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities, LLC, as lead arrangers and book runners, and JPMorgan Chase Bank, N.A., Bank of America, N.A., and Wells Fargo Bank, National Association, as syndication agents.
The 364 Day Credit Agreement consists of a $1 billion revolving credit loan, which may be drawn by the Company and its subsidiaries which are designated as Designated Borrowers under the 364 Day Credit Agreement (each, a “364Borrower”). The Company guarantees its obligations and the obligations of each Designated Borrower under the 364 Day Credit Agreement.
Borrowings under the 364 Day Credit Agreement may be made in US Dollars or Euros, pursuant to the terms of the 364 Day Credit Agreement. Borrowings under the 364 Day Credit Agreement bear interest at a floating rate or rates equal to, at the option of the Company, the Eurocurrency Rate or the Base Rate, plus the applicable margin specified in the 364 Day Credit Agreement.
The Company must repay all advances under the 364 Day Credit Agreement by the earlier of (i) September 11, 2019 or (ii) the date of termination in whole, at the election of the Company, of the commitments by the lenders under the 364 Day Credit Agreement (the “364 Termination Date”). The Company may, however, convert all Advances outstanding on the 364 Termination Date in effect at such time into a term loan (“Term Loan”), provided that the Company, among other things, pays a fee to the administrative agent for the account of each lender. The Term Loan shall be repaid in full no later than the first anniversary of the 364 Termination Date.
Each 364 Borrower may prepay Advances, subject to the terms and conditions of the 364 Day Credit Agreement. In addition, the Company may be required, upon the request to the Required Lenders, to prepay any borrowings under the 364 Day Credit Agreement upon a change of control.
The proceeds under the 364 Day Credit Agreement may be used for general corporate purposes. None of the proceeds from the 364 Day Credit Agreement were drawn down at closing.
The 364 Day Credit Agreement contains customary affirmative and negative covenants that include, among other things:
| | • | | maintenance of an interest coverage ratio; |
| | • | | a limitation on creating liens on certain property of the Company and its subsidiaries; |
| | • | | a restriction on mergers, consolidations and sales of substantially all of the assets of the Company or its subsidiaries; and |
| | • | | a restriction on entering into certain sale-leaseback transactions. |
The 364 Day Credit Agreement contains customary events of default. If an event of default occurs and is continuing, the Company may be required to repay all amounts outstanding under the 364 Day Credit Agreement.
The description contained herein is a summary of certain material terms of the 364 Day Credit Agreement and is qualified in its entirety by reference to the 364 Day Credit Agreement attached as Exhibit 10.1 hereto and incorporated herein by reference.
On September 12, 2018, the Company also entered into an Amended and Restated Five Year Credit Agreement (the “5 Year Credit Agreement”) with each of the initial lenders named therein, Citibank, N.A., as administrative agent, Citibank, N.A., JPMorgan Chase Bank, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities, LLC, as lead arrangers and book runners, and JPMorgan Chase Bank, N.A., Bank of America, N.A. and Wells Fargo Bank, National Association, as syndication agents.
The 5 Year Credit Agreement amends and restates the Five Year Credit Agreement dated as of December 18, 2015, among the Company, Citibank, N.A., as administrative agent, and the lenders party thereto.
The 5 Year Credit Agreement consists of a $2 billion revolving credit loan (the “Revolving Credit Loan”), anda sub-limit of an amount equal to the Euro equivalent of $653,333,333.35 for swing line advances (“Swing Line Advances”), which may be drawn by the Company and its subsidiaries which are designated as Designated Borrowers under the 5 Year Credit Agreement (each, a “5 YearBorrower”). The Company guarantees its obligations and the obligations of each Designated Borrower under the 5 Year Credit Agreement.
