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| MWA > SEC Filings for MWA > Form 8-K on 18-Jun-2009 | All Recent SEC Filings |
18-Jun-2009
Entry into a Material Definitive Agreement, Financial Statements and
On June 18, 2009, the Company entered into Amendment No. 2 (the "Amendment") to its Amended and Restated Credit Agreement (the "Credit Facility") dated as of May 24, 2007, as amended by Amendment No. 1 dated as of June 21, 2007, among the Company, Mueller Group, LLC, as prior borrower, Bank of America, N.A., as Administrative Agent and an L/C Issuer, JPMorgan Chase Bank, N.A., as Syndication Agent and an L/C Issuer and the lenders party thereto. Capitalized terms not otherwise defined in this current report have their respective meanings set forth in the Credit Facility, as amended through the date of the Amendment. The Amendment, among other things, makes the changes described below.
Size of Credit Facility
The Amendment reduces the Revolving Credit Facility to an aggregate principal amount of $200.0 million and eliminates (i) the Company's option to increase the borrowing capacity under the term loan facilities, (ii) the swing line loan facility, and (iii) a receivables financing facility contained in the prior credit agreement. In addition, the Credit Facility allows a second lien facility in an amount of up to $250.0 million.
Upon the closing of the Amendment, the Company prepaid $100.0 million in aggregate principal amount of the Term Loan A facility and the Term Loan B facility. This prepayment reduced the outstanding principal of the Term Loan A facility and the Term Loan B facility to $120.4 million and $445.3 million, respectively.
Consolidated Leverage Ratio
The Amendment requires that the Consolidated Leverage Ratio at any time during
any Four-Quarter Period set forth below not exceed the ratio set forth below for
such period:
Maximum
Consolidated
Four Fiscal Quarters Ending Leverage Ratio
June 30, 2009 6.50 to 1.00
September 30, 2009 8.75 to 1.00
December 31, 2009 9.50 to 1.00
March 31, 2010 9.25 to 1.00
June 30, 2010 7.75 to 1.00
September 30, 2010 7.25 to 1.00
December 31, 2010 7.00 to 1.00
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March 31, 2011 6.50 to 1.00
June 30, 2011 6.25 to 1.00
September 30, 2011 through June 30, 2012 6.00 to 1.00
September 30, 2012 and each fiscal quarter thereafter 4.00 to 1.00
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Consolidated Interest Charge Coverage Ratio
The Amendment requires that the Consolidated Interest Charge Coverage Ratio at
the end of any fiscal quarter of the Borrower set forth below not be less than
the ratio set forth below for such period:
Minimum Consolidated
Four Fiscal Quarters Ending Interest Coverage Ratio
June 30, 2009 1.50 to 1.00
September 30, 2009 through March 31, 2010 1.25 to 1.00
June 30, 2010 1.45 to 1.00
September 30, 2010 1.55 to 1.00
December 31, 2010 1.60 to 1.00
March 31, 2011 1.70 to 1.00
June 30, 2011 1.80 to 1.00
September 30, 2011 through June 30, 2012 1.90 to 1.00
September 30, 2012 through June 30, 2013 2.75 to 1.00
September 30, 2013 and each fiscal quarter thereafter 3.00 to 1.00
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Consolidated Senior Secured First Lien Leverage Ratio
The Amendment adds a new covenant that requires that the Consolidated Senior
Secured First Lien Leverage Ratio at any time during any Four-Quarter Period set
forth below not exceed the ratio set forth below for such period:
3
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Maximum Consolidated
Senior Secured First
Four Fiscal Quarters Ending Lien Leverage Ratio
June 30, 2009 3.75 to 1.00
September 30, 2009 5.00 to 1.00
December 31, 2009 through March 31, 2010 5.25 to 1.00
June 30, 2010 4.50 to 1.00
September 30, 2010 through December 31, 2010 4.00 to 1.00
March 31, 2011 through June 30, 2012 3.50 to 1.00
September 30, 2012 and each fiscal quarter thereafter 2.50 to 1.00
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Capital Expenditures
The Amendment adds a new covenant limiting Consolidated Capital Expenditures to $25.0 million for the two consecutive fiscal quarters of the Company ending September 30, 2009 and to amounts ranging from $54.0 million to $85.0 million for subsequent fiscal years, subject to limited increases equal to (i) 50.0% of the amount by which the Company reduces cash dividend payments from the prior fiscal year, (ii) 50% of the permitted Consolidated Capital Expenditure amounts not fully used in the prior fiscal year and (iii) 50.0% of net cash proceeds from the sale of Equity Interests that are not subject to mandatory prepayments, provided that the increase shall not exceed $10.0 million.
Mandatory Prepayments
The Amendment increases mandatory prepayment requirements upon the sale of assets. It also adds requirements for mandatory prepayment upon the sale of equity or the issuance of debt and from Excess Cash Flow, in each case and in certain circumstances based on the Company's Consolidated Leverage Ratio or Consolidated Senior Secured First Lien Leverage Ratio.
Other Covenants
The Amendment amends certain covenants to further restrict the ability of the Company to make certain Restricted Payments and to make acquisitions.
Under the Amendment, the interest rates applicable to the borrowings are equal to LIBOR plus the Applicable Margin or, at the Company's option, the Base Rate. The Base Rate is equal to the Applicable Margin plus the highest of (i) the prime rate, (ii) the Federal Funds Rate plus 0.50% and (iii) one-month LIBOR plus 1.00%. The Applicable Margin and the Commitment Fee on the unused portion of the revolving credit facility are equal to the amounts set forth below.
Revolving Applicable Margin on
Loans, Segments of the
Term Loan A and Term Loan B and
Letter of Credit Fees
Eurocurrency Rate
Pricing Consolidated Senior Secured Base Rate Loans and Letter of
Level First Lien Leverage Ratio Loans Credit Fees Commitment Fee
1 Greater than 4.00 to 1.00 5.00% 6.00% 0.750%
2 Less than or equal to 4.00 to
1.00 but greater than 3.00 to
1.00 4.50% 5.50% 0.625%
3 Less than or equal to 3.00 to
1.00 4.00% 5.00% 0.500%
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In addition, the Company agreed to pay each lender that approved the Amendment an amendment fee in an amount equal to 0.500% of the outstanding borrowings and commitments under the Credit Facility attributable to the lender.
A copy of Amendment No. 2 to the Amended and Restated Credit Agreement is attached hereto as Exhibit 10.1.2 and is incorporated by reference. The above description of the Amended and Restated Credit Agreement, as amended by Amendment No. 2, is qualified in its entirety by reference to the attached agreement.
(d) Exhibits.
10.1.2 Amendment No. 2 dated as of June 18, 2009 to the Amended and Restated
Credit Agreement dated as of May 24, 2007, as amended by Amendment No.
1 dated as of June 21, 2007, among Mueller Water Products, Inc., as
Borrower, Mueller Group, LLC, as prior borrower, Bank of America, N.A.,
as Administrative Agent and an L/C Issuer, JPMorgan Chase Bank, N.A.,
as Syndication Agent, and an L/C Issuer and the lenders named on the
signature pages thereto.
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