Item 1.01.
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Entry into a Material Definitive Agreement.
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On December 19, 2019, Visteon Corporation (the “Company”) entered into Amendment No. 5 (the “Amendment”) to its credit agreement, dated as of April 9, 2014 (as amended by that certain Waiver and Amendment No. 1 to Credit Agreement, dated as of March 25, 2015, Amendment No. 2 to Credit Agreement, dated as of March 24, 2017, Amendment No. 3 to Credit Agreement, dated as of November 14, 2017, and Amendment No. 4 to Credit Agreement, dated as of May 30, 2018, the “Existing Credit Agreement”; and the Existing Credit Agreement, as amended by the Amendment, the “Credit Agreement”) with Citibank, N.A., as administrative agent, the guarantors party thereto and certain lenders party thereto. The Amendment provides for (i) the replacement and extension of the existing revolving credit facility with a new revolving credit facility (the “Refinancing Revolving Facility” and any loans made pursuant thereto, “New Revolving Credit Loans”) in an aggregate principal amount of $400,000,000 and (ii) certain other modifications to the Existing Credit Agreement as described below and therein.
At the Company’s option, New Revolving Credit Loans may be maintained from time to time at an interest rate equal to the applicable domestic rate (“Base Rate”) plus an applicable margin or the LIBOR-based rate (“Eurodollar Rate”) plus an applicable margin. The applicable margin will range from 1.00% to 2.00% on Eurodollar Rate loans and from 0.00% to 1.00% on Base Rate loans, based on the Company’s Total Gross Leverage Ratio (as defined in the Credit Agreement) from time to time. The Company will also pay a commitment fee between 0.15% and 0.25%, payable quarterly, on the average daily unused amount of the Refinancing Revolving Facility based on the Company’s Total Gross Leverage Ratio from time to time.
Up to $75,000,000 of the Refinancing Revolving Facility is available for the issuance of letters of credit, and any such issuance of letters of credit will reduce the amount available for New Revolving Credit Loans. Up to $20,000,000 of the Refinancing Revolving Facility is available for swing line advances, and any such swing line advances will reduce the amount available for New Revolving Credit Loans. The Company may request an increase in the limit under the Refinancing Revolving Facility.
Subject to certain exceptions, the Refinancing Revolving Facility shall mature on December 24, 2024 (the “Refinancing Revolving Facility Maturity Date”). New Revolving Credit Loans are due and payable in full on the Refinancing Revolving Facility Maturity Date. Outstanding borrowings are prepayable without penalty in $100,000 increments over $500,000 for loans maintained under the Base Rate and in $250,000 increments over $1,000,000 for loans maintained under the Eurodollar Rate.
The Credit Agreement requires the Company and its subsidiaries to comply with customary affirmative and negative covenants, including a financial covenant for the benefit of the lenders under the Refinancing Revolving Facility, and contains customary events of default. Pursuant to such financial covenant, the Company is not to permit the total net leverage ratio as of the last day of a test period to exceed 3:50:1:00.
All obligations under the Credit Agreement and obligations in respect of certain cash management services and swap agreements with the lenders and their affiliates are (i) unconditionally guaranteed by certain of the Company’s subsidiaries and (ii) secured by a first-priority perfected lien (subject to certain exceptions) in substantially all of the property of the Company and the subsidiaries party to the security documents, subject to certain limitations.