Five Year Credit Agreement
On June 28, 2024, 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 Bank of America, N.A., JPMorgan Chase Bank, 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 8, 2021, among the Company, the lenders named therein and Citibank, N.A., as administrative agent.
The 5 Year Credit Agreement consists of a $2.25 billion revolving credit loan (the “Revolving Credit Loan”), and a sub-limit of an amount equal to the Euro equivalent of $800,000,000 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 Year Borrower”). The Company guarantees its obligations and the obligations of each Designated Borrower under the 5 Year Credit Agreement.
Borrowings under the Revolving Credit Loan may be made in US Dollars, Euros or Pounds Sterling, and borrowings under the Swing Line Advances shall be made in Euros, pursuant to the terms of the 5 Year Credit Agreement. Borrowings under the Revolving Credit Loan bear interest at rates equal to, at the option of the Company, the Base Rate, Term SOFR, the EURIBO Rate or SONIA (as such terms are defined in the 5 Year Credit Agreement).
The Company must repay all advances under the Revolving Credit Loan by the earlier of (i) June 28, 2029 or (ii) the date of termination in whole, at the election of the Company, of the commitments by the lenders under the 5 Year Credit Agreement (the “5 Year Termination Date”). The 5 Year Credit Agreement provides the Company with the right to request, no earlier than 60 days but no later than 45 days prior to June 28, 2025, and again prior to June 28, 2026, that the 5 Year Termination Date be extended for one year (each such extension, an “Extension”) as long as certain conditions specified in the 5 Year Credit Agreement are satisfied. Any lender may refuse the request for an Extension (each such lender, a “Declining Lender”). Any Declining Lender may be replaced by the Company with one or more banks or other financial institutions with the approval of the Administrative Agent and each Swing Line Lender (as defined in the 5 Year Credit Agreement). The Company must repay all Swing Line Advances by the earlier of (i) the 5 Year Termination Date and (ii) seven business days after such Swing Line Advance is made.
Each 5 Year Borrower may prepay advances, subject to the terms and conditions of the 5 Year Credit Agreement. In addition, upon a change of control, the Company may be required to prepay any borrowings under the 5 Year Credit Agreement upon request of the lenders holding at least a majority of the commitments under the 5 Year Credit Agreement.
The proceeds under the 5 Year Credit Agreement may be used solely for general corporate purposes. None of the proceeds from the 5 Year Credit Agreement were drawn down at closing.
The 5 Year 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 Company must maintain, for each period of four consecutive fiscal quarters of the Company, an interest coverage ratio of not less than 3.50 to 1.00, provided that the Company is only required to maintain an interest coverage ratio of not less than (i) 1.50 to 1.00 for any four quarter period ending on or before the end of the Company’s second fiscal quarter of 2024, and (ii) 2.50 to 1.00 for any four quarter period ending after the Company’s second fiscal quarter of 2024 through and including the Company’s second fiscal quarter of 2025. For purposes of calculating the Company’s compliance with the interest coverage ratio, the Company is permitted to increase EBITDA by an amount equal to the Applicable Adjustment Addbacks (as defined in the 5 Year Credit Agreement) incurred prior to the end of the Company’s second fiscal quarter of 2025, provided that (A) the sum of the Applicable Adjustment Addbacks incurred through and including the Company’s second fiscal quarter of 2024 may not exceed $500,000,000 in the aggregate, and (B) the sum of the Applicable Adjustment Addbacks incurred from the Company’s third fiscal quarter of 2024 through and including the Company’s second fiscal quarter of 2025 may not exceed $250,000,000 in the aggregate; provided, further, that the sum of the Applicable Adjustment Addbacks for any four quarter period may not exceed $500,000,000 in the aggregate.
