| Item 1.01 | Entry into a Material Definitive Agreement. |
On December 15, 2022, Superior Industries International, Inc. (the “Company”), Oaktree Fund Administration, LLC, in its capacity as administrative agent, JPMorgan Chase Bank, N.A., in its capacity as collateral agent, and the other lenders party thereto entered into a credit agreement (the “Term Loan Credit Agreement”). Simultaneously with the execution of the Term Loan Credit Agreement, the Company, the other borrowers party thereto, JPMorgan Chase Bank, N.A., in its capacity as administrative agent, collateral agent and issuing bank, and the other lenders and issuing banks party thereto entered into a revolving credit agreement (the “Revolving Credit Agreement” and, together with the Term Loan Credit Agreement, the “Credit Agreements”). JPMorgan Chase Bank, N.A. and Deutsche Bank Securities Inc. acted as joint lead arrangers and joint bookrunners for the Revolving Credit Agreement.
The Credit Agreements make available to the Company (i) an aggregate principal amount of $400.0 million of term loans, all of which were funded on December 16, 2022, and (ii) a maximum aggregate amount of $60.0 million of revolving loan commitments, which may be drawn, subject to customary borrowing conditions, until maturity on December 15, 2027. The term loans mature on December 15, 2028. The loans and commitments under the Credit Agreements will also mature on the date that is 91 days prior to June 15, 2025 if the Company has not repaid or refinanced the Senior Notes by such date and will mature on the date that is 91 days prior to September 14, 2025 if the Company has not extended the mandatory redemption date of the Preferred Stock by such date (including through a refinancing). Subject to certain conditions, the Company may at any time request one or more increases in the amount of the term loan and revolving loan commitments, up to an aggregate maximum additional amount set forth in the applicable Credit Agreement.
The Company’s obligations under the Credit Agreements are unconditionally guaranteed by all material direct and indirect subsidiaries of the Company (the “Subsidiary Guarantors”), with customary exceptions. Borrowings under the Credit Agreements are secured by substantially all of the assets of the Company and the Subsidiary Guarantors, other than certain excluded assets. The Company’s obligations under the Revolving Credit Agreement will be secured by liens on a super-priority basis ranking ahead of the liens securing the Term Loan Credit Agreement.
Amounts borrowed under the Revolving Credit Agreement may be repaid or reborrowed at any time. Amounts borrowed under the Term Loan Credit Agreement may be voluntarily prepaid at any time and must be repaid upon certain Asset Sales or non-permitted debt incurrence events and from a percentage of Excess Cash Flow. Voluntary prepayments of the loans under the Term Loan Credit Agreement are subject to a prepayment premium, as specified in the Term Loan Credit Agreement. The foregoing prepayment premium is also payable upon an acceleration of the loans under the Term Loan Credit Agreement following an Event of Default during the applicable periods. No prepayment premium will be due and payable following the third anniversary of the closing date.
Interest on the borrowings under the Credit Agreements accrues, at a variable rate, based on, at the Company’s option, (i) adjusted SOFR (or, with respect to any revolving borrowings denominated in euros, adjusted Euribor), or (ii) the alternate base rate, plus, in each case, an applicable margin determined by reference to the Company’s Secured Net Leverage Ratio, as specified in the applicable Credit Agreement, and will be due on each Interest Payment Date.
The Credit Agreements contain customary events of default, representations and warranties and covenants, including, among other things, financial covenants and covenants that restrict the ability of the Company and its subsidiaries to incur certain additional indebtedness and restrict the ability of the Company and its subsidiaries to create or permit liens on assets, engage in mergers or consolidations or make certain payments or distributions in respect of junior indebtedness or equity interest as well as negative pledge provisions.
The proceeds of the term and revolving loans under the Credit Agreements (i) were used on the closing date to (a) repay all of the Company’s outstanding indebtedness under (x) that certain Credit Agreement, dated as of March 22, 2017, by and among the Company, Citibank, N.A., as administrative agent and collateral agent, and certain other lenders and issuing banks from time to time party thereto, as amended, restated or otherwise modified from time to time, and (y) that certain Senior Facilities Agreement, dated as of September 3, 2014, by and among Superior Industries Europe AG, a stock corporation (Aktiengesellschaft) organized under the laws of the Federal Republic of
1
