| Item 1.01 | Entry into a Material Definitive Agreement. |
364-Day Credit Agreement
On September 8, 2021, Stanley Black & Decker, Inc., a Connecticut corporation (the “Company”) entered into a 364-Day Credit Agreement (the “364 Day Credit Agreement”) with each of the initial lenders named therein, Citibank, N.A., as administrative agent, Citibank, N.A., BofA Securities, Inc., JPMorgan Chase Bank, N.A., and Wells Fargo Securities, LLC, as lead arrangers and book runners, and Bank of America, N.A., JPMorgan Chase Bank, 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 “364 Borrower”). 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 rates equal to, at the option of the Company, the eurocurrency rate or the base rate.
The Company must repay all advances under the 364 Day Credit Agreement by the earlier of (i) September 7, 2022 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, upon a change of control, the Company may be required to prepay any borrowings under the 364 Day Credit Agreement upon request of the lenders holding at least a majority of the commitments under the 364 Day Credit Agreement.
The proceeds under the 364 Day Credit Agreement may be used solely 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, liquidations or 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.
Five Year Credit Agreement
On September 8, 2021, 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., BofA Securities, Inc., JPMorgan Chase Bank, N.A., 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 Amended and Restated Five Year Credit Agreement dated as of September 12, 2018, among the Company, Citibank, N.A., as administrative agent, and the lenders party thereto.
