Toro Company filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation, Financial Statements and Exhibits
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 2, 2024
(Exact name of registrant as specified in its charter)
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Item 1.01. Entry into a Material Definitive Agreement.
On October 2, 2024, The Toro Company (“TTC”) and Toro Luxembourg S.à r.l. (collectively, the “Borrowers”) entered into a Second Amended and Restated Credit Agreement (the “5-Year Credit Agreement”) with certain lenders, Bank of America, N.A., as administrative agent (in such capacity, the “Administrative Agent”), swingline lender and L/C issuer, U.S. Bank, National Association and Wells Fargo Bank National Association, as co-syndication agents (in such capacities, the “Co-Syndication Agents”) and BMO Bank N.A., HSBC Bank USA, National Association and PNC Bank, National Association, as co-documentation agents. The 5-Year Credit Agreement provides for (i) a five-year unsecured term loan in an aggregate principal amount of up to $200 million to TTC (the “Term Facility”), the entire amount of which was funded on October 2, 2024, and (ii) a five-year unsecured revolving credit facility in an aggregate principal amount of up to $900 million to the Borrowers, including a $10 million sublimit for the issuance of standby letters of credit and a $75 million sublimit for swingline loans (the “Revolving Facility” and, collectively with the Term Facility, the “Facilities”). TTC may request that (i) the maximum principal amount available under the Revolving Facility be increased by an amount of up to $450 million and/or (ii) incremental term loan commitments be established by an amount of up to $100 million.
Subject to customary closing conditions, funds are available under the Facilities (i) for general working capital, capital expenditures and other lawful corporate purposes, (ii) the purchase of TTC’s capital stock and preferred stock rights, and (iii) to replace and refinance outstanding indebtedness under the Prior Credit Agreement (as defined below). Loans under the Revolving Facility are available in U.S. Dollars, Euros, British Pounds Sterling, Australian Dollars, Mexican Pesos and Canadian Dollars and, at the discretion of the lenders, other currencies. Loans under the Term Facility are available in U.S. Dollars.
In addition to certain initial fees payable to the Administrative Agent, the Co-Syndication Agents and their respective affiliates, the Borrowers are obligated to pay a facility fee based on the availability of commitments under the Revolving Facility which is payable quarterly in arrears to each applicable lender. At the option of TTC, any loan under the Facilities (other than the swingline loans) will bear interest at a variable rate generally equal to an alternative variable rate based on the highest of the Bank of America prime rate, the federal funds rate or a rate generally based on Term SOFR, in each case depending on the leverage ratio (as measured quarterly and defined as the ratio of (i) total indebtedness to (ii) consolidated EBIT (earnings before interest and taxes) plus depreciation and amortization expense) and debt rating of TTC. Swingline loans bear interest at a rate determined by the swingline lender or an alternative variable rate based on the highest of the Bank of America prime rate, the federal funds rate or a rate generally based on Term SOFR, in each case depending on the leverage ratio and debt rating of TTC. Interest is payable quarterly in arrears. Beginning December 31, 2027 and ending September 30, 2029, TTC will make quarterly amortization payments on the Term Facility with each such payment equal to $5,000,000. On October 31, 2029, the aggregate principal amount of any outstanding amounts under the Term Facility will be repaid.
The 5-Year Credit Agreement contains customary covenants regarding TTC and its subsidiaries, including, without limitation a maximum leverage ratio and negative covenants, which, among other things, limit dividends, disposition of assets, consolidations and mergers, liens and other matters customarily restricted in such agreements. Most of these restrictions are subject to certain minimum thresholds and exceptions. The 5-Year Credit Agreement also contains customary events of default, including, without limitation, payment defaults, material inaccuracy of representations and warranties, covenant defaults, bankruptcy and insolvency proceedings, cross-defaults to certain other agreements, and change of control.
BofA Securities, Inc., U.S. Bank National Association and Wells Fargo Securities, LLC served as joint lead arrangers and joint bookrunners for the Facilities, for which they each received customary compensation. In addition, the Administrative Agent and the Co-Syndication Agents and certain of the other lenders and their respective affiliates have in the past performed, and may in the future from time to time perform, investment banking, financial advisory, lending and/or commercial banking services for TTC and its subsidiaries, for which service they have in the past received, and may in the future receive, customary compensation and reimbursement of expenses.
In connection with the execution of the 5-Year Credit Agreement, under that certain amended and restated credit agreement, dated as of October 5, 2021, between TTC and certain lenders, Bank of America, N.A., as administrative agent, swing line lender and L/C issuer, Wells Fargo Bank, National Association and U.S. Bank National
Association, as co-syndication agents, and BMO Harris Bank, N.A. and HSBC Bank USA, National Association, as co-documentation agents (the “Prior Credit Agreement”), the $270 million term loans outstanding were repaid in full and the prior $600 million unsecured revolving credit facility was replaced. As of October 2, 2024, borrowings outstanding under the revolving credit facility were approximately $17.7 million.
The foregoing description of the 5-Year Credit Agreement is a summary of the material terms of such agreement, does not purport to be complete and is qualified in its entirety by reference to the complete text of the agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Section 2—Financial Information
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 “Section 1 – Registrant’s Business and Operations – Item 1.01 Entry into a Material Definitive Agreement” is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
| Exhibit No. | Description | ||||
| 10.1 | |||||
| 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.
| THE TORO COMPANY | |||||
| (Registrant) | |||||
| Date: October 3, 2024 | /s/ Joanna M. Totsky | ||||
| Joanna M. Totsky | |||||
| Vice President, General Counsel and Corporate Secretary | |||||