Item 1.01. Entry into a Material Definitive Agreement.
Amended and Restated Credit Agreement with Bank of America, N.A., as
Administrative Agent
On September 13, 2021 (the "Closing Date"), Flowserve Corporation (the
"Company") amended and restated its credit agreement (the "Amended and Restated
Credit Agreement") with Bank of America, N.A., as administrative agent, and the
other lenders (together, the "Lenders") and letter of credit issuers party
thereto to (1) retain, from the Existing Credit Agreement (as defined below),
the $800.0 million unsecured revolving credit facility (which includes a
$750.0 million sublimit for the issuance of letters of credit and a
$30.0 million sublimit for swing line loans) and the right, subject to certain
conditions including a Lender approving any such increase, to increase the
amount of such revolving credit facility by an aggregate amount not to exceed
$400.0 million and (2) provide for an up to $300 million unsecured term loan
facility, a maturity date for the revolving and term loans of September 13, 2026
and the ability to make certain adjustments to the otherwise applicable
commitment fee, interest rate and letter of credit fees based on the Company's
performance against to-be-established key performance indicators with respect to
certain of the Company's environmental, social and governance targets.
On the Closing Date, approximately $300.0 million was drawn under the Amended
and Restated Credit Agreement to fund, in part, the previously announced
redemption of the Company's 3.500% Senior Notes due September 2022 and 4.000%
Senior Notes due November 2023. As of the Closing Date, the Company had no
revolving loans outstanding and had $78.0 million of outstanding letters of
credit under the Company's then-existing Credit Agreement dated as of July 16,
2019, as amended, among the Company, Bank of America, N.A., as administrative
agent, swing line lender and a letter of credit issuer, and the other lenders
and letter of credit issuers party thereto (the "Existing Credit Agreement"). In
connection with the amendment and restatement of the Existing Credit Agreement
on the Closing Date, the Company's outstanding letters of credit under the
Existing Credit Agreement were transferred to be under the Amended and Restated
Credit Agreement. Future draws under the Amended and Restated Credit Facility
will be subject to various conditions, including the absence of defaults under
the Amended and Restated Credit Agreement.
The interest rates per annum applicable to the revolving credit facility under
the Amended and Restated Credit Agreement (other than in respect of swing line
loans) will be LIBOR (with respect to loans in Dollars), SONIA (with respect to
loans in Sterling), EURIBOR (with respect to loans in Euros) or such other rate
determined by the Administrative Agent (with respect to loans in currencies
approved pursuant to the terms of the Amended and Restated Credit Agreement
which are not Dollars, Sterling or Euros) (collectively, the "Relevant Rate")
plus between 1.000% to 1.750% depending on the Company's debt rating by either
Moody's Investors Service, Inc. ("Moody's") or Standard & Poor's Financial
Services LLC ("S&P"), or, at the option of the Company, the Base Rate (as
defined in the Credit Agreement) plus between 0.000% to 0.750% depending on the
Company's debt rating by either Moody's or S&P. The interest rates per annum
applicable to the term loan facility under the Amended and Restated Credit
Agreement will be LIBOR plus between 0.875% to 1.625% depending on the Company's
debt rating by either Moody's or S&P, or, at the option of the Company, the Base
Rate (as defined in the Credit Agreement) plus between 0.000% to 0.625%
depending on the Company's debt rating by either Moody's or S&P. As of the
Closing Date, the initial interest rate on the revolving credit facility under
the Amended and Restated Credit Agreement was the Relevant Rate plus 1.375% in
the case of Relevant Rate loans and the Base Rate plus 0.375% in the case of
Base Rate loans, and the initial interest rate on the term loan facility under
the Amended and Restated Credit Agreement was LIBOR plus 1.250% in the case of
LIBOR loans and the Base Rate plus 0.250% in the case of Base Rate loans.
Beginning on the Closing Date, a commitment fee will be payable quarterly in
arrears on the daily unused portions of the revolving facility under the Amended
and Restated Credit Agreement. The commitment fee will be between 0.080% and
0.250% of unused amounts under the revolving credit facility depending on the
Company's debt rating by either Moody's or S&P.
The Credit Agreement includes customary representations and warranties,
affirmative and negative covenants, and events of default, including maintenance
of consolidated net leverage ratios and interest coverage. If an event of
default occurs and is continuing, the Lenders have the right to declare all
outstanding loans immediately due and payable.
The foregoing description of the Amended and Restated Credit Agreement does not
purport to be a complete statement of the parties' rights and obligations under
the Amended and Restated Credit Agreement and the transactions contemplated
therein, and is qualified in its entirety by reference to the Amended and
Restated Credit Agreement, a copy of which is attached as Exhibit 10.1 to this
Current Report on Form 8-K.
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Item 1.02. Termination of a Material Definitive Agreement.
The disclosures required by this Item 1.02 are incorporated herein by reference
to the disclosures set forth above under Item 1.01 regarding the termination of
the Existing Credit Agreement.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The disclosures required by this Item 2.03 are incorporated herein by reference
to the disclosures contained under Item 1.01 above.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
10.1 Amended and Restated Credit Agreement, dated as of
September 13, 2021, among Flowserve Corporation, Bank of America,
N.A., as swing line lender, a letter of credit issuer and
administrative agent, and the other lenders and swing line
lenders referred to therein.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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