GRIFFON CORPORATION Item 1.01. Entry into a Material Definitive Agreement
Amendment to Credit Agreement
On
The Amended Credit Agreement provides for, among other things, the incurrence of
a new Term B Loan in the aggregate principal amount of
The Amended Credit Agreement contains a feature that permits the Company to
incur incremental debt by up to the greater of (i)
Borrowings under the Revolving Credit Facility may be repaid and re-borrowed at
any time, subject to final maturity of the Revolving Credit Facility or the
occurrence of a default or event of default under the Amended Credit Agreement.
The Term B Facility is subject to quarterly amortization of principal equal to
1.00% per annum of the aggregate principal amount of all Term B Loans. Amounts
repaid or prepaid in respect of Term B Loans may not be reborrowed. The maturity
date of the Revolving Credit Facility remains
The Amended Credit Agreement also contains mandatory prepayment provisions triggered upon the receipt of net cash proceeds from certain dispositions of property and assets (subject to certain exceptions and reinvestment rights), Extraordinary Receipts (as defined in the Amended Credit Agreement) (subject to certain reinvestment rights), proceeds of indebtedness not permitted to be incurred under the Amended Credit Agreement and based on
excess cash flow (commencing with the fiscal year ending on
The Amended Credit Agreement incorporates a SOFR-Based Rate for purposes of replacing LIBOR. Interest on the Term B Facility is payable on the outstanding aggregate principal amount of Term B Loans at either a Term SOFR or Alternate Base Rate plus an applicable margin, which may potentially decrease based on the Company's financial performance. The initial margins under the Term B Facility are 1.75% for ABR Loans and 2.75% for Term SOFR Loans.
The Term B Facility does not contain any financial maintenance covenants. The Revolving Credit Facility contains the following financial maintenance tests:
? A consolidated net leverage ratio that is calculated as a ratio of consolidated
net funded debt to consolidated EBITDA, which ratio is currently set at a
maximum of 5.75:1.00, and will step down to 5.50:1.00 on
? A consolidated senior secured net leverage ratio that is calculated as a ratio
of consolidated senior secured net funded debt to consolidated EBITDA, which
ratio is set at a maximum of 3.50:1.00.
? A consolidated interest coverage ratio that is calculated as a ratio of
consolidated EBITDA to consolidated interest expense. This ratio is set at a
minimum of 2.00:1.00.
Capital expenditures are subject to a
Other material terms of the Term B Facility and the Revolving Credit Facility include customary affirmative and negative covenants and events of default. A financial maintenance covenant default under the Revolving Credit Facility does not trigger an event of default under the Term B Facility unless a majority of the revolving lenders terminate the commitments under the Revolving Credit Facility and accelerate the revolving loans. The Company is subject to certain customary negative covenants which include restrictions on indebtedness, liens, restricted payments and investments.
Under the Guarantee and Collateral Agreement, all borrowings under the Amended Credit Agreement are guaranteed by the Company and its material domestic subsidiaries, and are secured on a first priority basis by substantially all assets (except real property) of the Company and its material domestic subsidiaries. None of the Company's foreign subsidiaries guarantees the obligations under the Amended Credit Agreement.
The description of certain terms of the Amendment set forth herein does not purport to be complete and is qualified in its entirety by the full text of the Amendment, which is filed as Exhibit 99.1 hereto and is incorporated herein by reference.
Item 2.01. Completion of Acquisition or Disposition of Assets.
As described above, on
The information in the Introductory Note is incorporated by reference into this Item 2.01. A copy of the press release announcing the closing of the Hunter Acquisition is attached hereto as Exhibit 99.2 and incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information provided in Item 1.01 of this Report is hereby incorporated by reference into this Item 2.03.
Item 9.01. Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired
The financial statements required by this Item 9.01(a) will be filed by amendment to this current report on Form 8-K not later than 71 days after the date by which this Current Report on Form 8-K is required to be filed.
(b) Pro Forma Financial Information
The pro-forma financial information required by this Item 9.01(b) will be filed by amendment to this current report on Form 8-K not later than 71 days after the date by which this Current Report on Form 8-K is required to be filed.
(d) Exhibits.
99.1 Second Amendment to Fourth Amended and Restated Credit Agreement, dated
as of January 24, 2022 , by and among Griffon Corporation and certain of its
subsidiaries, Bank of America, N.A ., as administrative agent, and the
several banks and other financial institutions or entities from time to
time parties thereto.
99.2 Press Release, dated January 24, 2022 .© Edgar Online, source
