Item 1.01.
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Entry into a Material Definitive Agreement
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On June 14, 2017, Ashland LLC, a Kentucky limited liability company (the “
Company
”) and an indirect subsidiary of Ashland Global Holdings Inc., a Delaware corporation (“
Ashland
”), entered into Amendment No. 2 (the “
Amendment
”) to the Credit Agreement, dated as of May 17, 2017 (the “
Credit Agreement
”), among the Company, as Borrower, The Bank of Nova Scotia, as Administrative Agent, each lender and letter of credit issuer party thereto and the other agents party thereto. The Amendment provides for a new $600 million seven-year senior secured term loan B facility (the “
TLB Facility
”) under the Credit Agreement.
In connection with the TLB Facility, Ashland issued a notice of redemption in respect of all of its outstanding 3.875% Senior Notes due 2018, of which approximately $659 million are currently outstanding. The redemption is scheduled to occur on June 26, 2017. As set forth in the redemption notice, Ashland's obligation to redeem the notes is subject to the condition that Ashland receives not less than $600 million in gross proceeds from borrowings under the TLB Facility, which condition has now been satisfied. Proceeds of borrowings under the TLB Facility, together with cash on hand, will be used to pay for the redemption.
At the Company’s option, loans issued under the TLB Facility will bear interest at either (x) LIBOR plus 2.00% per annum or (y) an alternate base rate plus 1.00% per annum. The TLB Facility may be prepaid at any time, subject to a prepayment premium if the prepayment is made on or prior to December 14, 2017 in connection with a Repricing Transaction (as defined in the Credit Agreement). The TLB Facility will amortize at a rate of 1.00% per annum (payable in equal quarterly installments) with the outstanding balance to be paid on May 17, 2024.
Except as otherwise provided in the Credit Agreement and subject to the following sentence, the guarantees, security provisions, events of default and covenants of the TLB Facility are substantially the same as those of the term loan A facilities and the Revolving Credit Facility under the Credit Agreement. The TLB Facility does not have the benefit of the financial maintenance covenants set forth in the Credit Agreement.
The foregoing summary of the Amendment does not purport to be complete and is subject to and qualified in its entirety by reference to the Amendment, a copy of which is filed as Exhibit 10.1 hereto and incorporated herein by reference.
The Credit Agreement has been previously filed with, and is described in, Ashland’s Current Report on Form 8-K dated May 18, 2017.