| Item 1.01. | Entry into a Material Definitive Agreement. |
On April 14, 2024, 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 an amended and restated credit agreement (the “Amended and Restated Term Loan Credit Agreement”), which amended and restated the Company’s existing term loan credit agreement, dated as of December 15, 2022, to, among other things, provide for a new $520.0 million term loan, the proceeds of which will be applied to (1) refinance the outstanding term loans under the Company’s existing term loan credit agreement, (2) discharge the outstanding principal amount of the Notes (as defined below), (3) pay fees and expenses in connection with the foregoing and (4) for general corporate purposes. The term loan matures on December 15, 2028 (with no springing maturity).
Amounts borrowed under the Amended and Restated Term Loan Credit Agreement may be voluntarily prepaid at any time and must be repaid if the Company’s liquidity exceeds a certain threshold, upon certain asset sales and non-permitted debt incurrence events and from a percentage of the Company’s excess cash flow. Certain prepayments of the loan under the Amended and Restated Term Loan Credit Agreement are subject to a prepayment premium, as specified in the Amended and Restated Term Loan Credit Agreement. No prepayment premium will be due and payable following the third anniversary of the date the Amended and Restated Term Loan Credit Agreement is entered into.
Simultaneously with the execution of the Amended and Restated Term Loan Credit Agreement, the Company, the other borrowers party thereto, JPMorgan Chase Bank, N.A., in its capacity as administrative agent and collateral agent, and the lenders and issuing banks party thereto entered into an First Amendment to Credit Agreement (the “Revolving Credit Agreement Amendment”) to the Company’s existing revolving credit agreement (the “Revolving Credit Agreement” and, as amended by the Revolving Credit Agreement Amendment, the “Amended Revolving Credit Agreement”; the Amended Credit Agreement, together with the Amended and Restated Term Loan Credit Agreement, the “Credit Agreements”), dated as of December 15, 2022, to among other things (i) amend the financial covenants applicable to the Company, (ii) amend the maturity date applicable to the revolving commitments to remove the springing maturity applicable thereto and (iii) require that the borrowings under the Amended Revolving Credit Agreement be repaid in the event the Company holds cash in excess of a certain threshold. The revolving commitments will terminate on December 15, 2027.
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 and the Term Loan Credit Agreement are secured by liens on a pari passu basis, but the obligations under the Revolving Credit Agreement have payment priority over the obligations under the Term Loan Credit Agreement.
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 foregoing description of the Credit Agreements does not purport to be complete and is qualified in its entirety by reference to the Credit Agreements, attached as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K, which are incorporated herein by reference.
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