Tennant Company filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation, Financial Statements and Exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
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Item 1.01 Entry into a Material Definitive Agreement.
On August 7, 2024, Tennant Company (the “Company”) and the Foreign Subsidiary Borrowers from time to time party thereto entered into a Second Amended and Restated Credit Agreement (the “2024 Credit Agreement”) with JPMorgan Chase Bank, N. A. (“JPMorgan”), as administrative agent, U.S. Bank National Association and HSBC Bank USA, National Association, as co-syndication agents and BMO Bank N.A., The Huntington National Bank, PNC Bank, National Association and Wells Fargo Bank, National Association, as co-documentation agents. The 2024 Credit Agreement provides the Company and certain of its foreign subsidiaries access to a senior secured credit facility until August 7, 2029, consisting of a revolving facility in an amount up to $650 million, with an option to expand the revolving facility or obtain incremental term loans by up to $325 million, with the consent of the Lenders willing to provide additional borrowings in the form of increases to their revolving facility commitment or funding of incremental term loans. Borrowings may be denominated in U.S. dollars or certain other currencies.
The fee for undrawn committed funds under the revolving facility of the 2024 Credit Agreement ranges from an annual rate of 0.15% to 0.30%, depending on the Company’s leverage ratio. Borrowings denominated in U.S. dollars under the 2024 Credit Agreement bear interest at a rate per annum equal to (a) the greatest of (i) the prime rate, (ii) the NYFRB Rate plus 0.50% and (iii) the Adjusted Term SOFR Rate for a one month period plus 1%; but in any case not less than 1%, plus an additional spread of 0.25% to 1%, depending on the Company’s leverage ratio, (b) the Adjusted Term SOFR Rate plus an additional spread of 1.25% to 2%, depending on the Company’s leverage ratio, or (c) the Adjusted Daily Simple RFR plus an additional spread of 1.25% to 2%, depending on the Company’s leverage ratio.
In connection with the 2024 Credit Agreement, the Company reaffirmed its security interest in favor of the lenders in substantially all its personal property and pledged the stock of certain of its domestic and foreign subsidiaries. The obligations under the 2024 Credit Agreement are also guaranteed by certain of the Company’s subsidiaries and those subsidiaries also provided a security interest in their similar personal property.
The 2024 Credit Agreement contains customary representations, warranties and covenants, including but not limited to covenants restricting the Company’s ability to incur indebtedness and liens and merge or consolidate with another entity. Further, the 2024 Credit Agreement contains the following covenants:
- a covenant requiring the Company to maintain an indebtedness to EBITDA ratio, determined as of the end of each of its fiscal quarters, of no greater than 3.75 to 1.00, with certain alternative requirements for permitted acquisitions of at least $50,000,000;
- a covenant requiring the Company to maintain an EBITDA to interest expense ratio for a period of four consecutive fiscal quarters as of the end of each quarter of no less than 3.00 to 1; and
- a covenant restricting the Company from paying dividends or repurchasing stock if, after giving effect to such payments and assuming no default exists or would result from such payment, the Company’s leverage ratio is greater than 2.50 to 1, in such case limiting such payments to the greater of 10% of consolidated total assets and $100 million during any fiscal year.
Upon the occurrence and during the continuance of certain events of default described in the 2024 Credit Agreement, JPMorgan, as administrative agent, may, among other things, declare the loans then outstanding to be due and payable in whole.
The full terms and conditions of the credit facility are set forth in the 2024 Credit Agreement. A copy of the 2024 Credit Agreement is filed as Exhibit 10.1 hereto and is incorporated by reference herein.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information described above under “Item 1.01 Entry into a Material Definitive Agreement” with respect to the 2024 Credit Agreement is hereby incorporated by reference.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits |
| 10.1 | Second Amended and Restated Credit Agreement, dated as of August 7, 2024. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Tennant Company | ||
| Date: August 7, 2024 | By: | /s/ Kristin A. Erickson |
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Kristin A. Erickson | ||
| Senior Vice President, General Counsel and Corporate Secretary | ||