ITEM 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
On December 16, 2021, Pentair plc ("Pentair") and its subsidiaries Pentair
Finance S.à r.l. ("Pentair Finance") and Pentair, Inc. ("Pentair U.S.") entered
into an Amended and Restated Credit Agreement (the "Amended and Restated Credit
Agreement"), among Pentair Finance and Pentair U.S., as borrowers, Pentair, as
guarantor, and the lenders and agents party thereto, providing for a five-year
$900.0 million senior unsecured revolving credit facility and a three-year
$200.0 million senior unsecured term loan facility (collectively, the "Senior
Credit Facilities"). The Amended and Restated Credit Agreement amends and
restates in its entirety the Credit Agreement, dated as of April 25, 2018, among
Pentair, Pentair Finance, Pentair U.S., Pentair Investments Switzerland GmbH and
the lenders and agents party thereto, as previously amended by an Amendment No.
1 dated as of December 2, 2019. Pentair Finance has the option to request to
increase the revolving credit facility and/or to enter into one or more
additional tranches of term loans in an aggregate amount of up to $300.0
million, subject to customary conditions, including the commitment of the
participating lenders. As of December 16, 2021, the total amount of loans
outstanding under the Senior Credit Facilities was $430.0 million.
The Senior Credit Facilities are guaranteed by Pentair. The Senior Credit
Facilities bear interest at a rate equal to an adjusted base rate, LIBOR,
EURIBOR, or CBR, plus, in each case, an applicable margin. The applicable margin
is based on, at Pentair Finance's election, Pentair's leverage level or Pentair
Finance's public credit rating. Additionally, Pentair Finance will pay a
quarterly facility fee based on the average daily amount of the revolving credit
facility (whether used or unused), which will be determined, at Pentair
Finance's election, by Pentair's leverage level or Pentair Finance's public
credit rating. Interest on borrowings and the facility fee are generally payable
quarterly in arrears or at the end of the interest period, unless such interest
period is longer than three months, in which case payment is due on each
successive date three months after the first day of such period.
With certain exceptions, the revolving credit facility matures on December 16,
2026 and the term loan facility matures on December 16, 2024. Pentair Finance is
permitted to voluntarily prepay loans and/or reduce the revolving commitments
under the Senior Credit Facilities, in whole or in part, without penalty or
premium, subject to certain minimum amounts and increments and the payment of
customary breakage costs. No mandatory prepayment will be required under the
Senior Credit Facilities unless certain affiliate and currency sub-limits are
exceeded, subject to certain other exceptions.
The Senior Credit Facilities contain financial covenants requiring Pentair not
to permit (i) the ratio of its consolidated debt (net of its consolidated
unrestricted cash and cash equivalents in excess of $5.0 million but not to
exceed $250.0 million) to its consolidated net income (excluding, among other
things, non-cash gains and losses) before interest, taxes, depreciation,
amortization and non-cash share-based compensation expense ("EBITDA") on the
last day of any period of four consecutive fiscal quarters (each, a "testing
period") to exceed 3.75 to 1.00 (or, at Pentair Finance's election and subject
to certain conditions, 4.25 to 1.00 for four testing periods in connection with
certain material acquisitions) and (ii) the ratio of its EBITDA to its
consolidated cash interest expense for the same period to be less than 3.00 to
1.00. In addition, subject to certain qualifications and exceptions, the Senior
Credit Facilities also contain covenants that, among other things, restrict
Pentair's ability to create liens, merge or consolidate with another person,
make acquisitions and incur subsidiary debt.
The Senior Credit Facilities contain customary events of default. If an event of
default occurs and is continuing, then the lenders may terminate all commitments
to extend further credit and declare all amounts outstanding under the Senior
Credit Facilities due and payable immediately. In addition, in the case of an
event of default arising from certain events of bankruptcy, insolvency or
reorganization, all amounts outstanding under the Senior Credit Facilities will
automatically become due and payable immediately.
The foregoing description of the Amended and Restated Credit Agreement is
qualified in its entirety by reference to the full text of the Amended and
Restated Credit Agreement filed as Exhibit 10.1 to this Current Report on Form
8-K, which is incorporated by reference herein.
ITEM 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired
Not applicable.
(b) Pro Forma Financial Information
Not applicable.
(c) Shell Company Transactions
Not applicable.
(d) Exhibits
The exhibits listed in the Exhibit Index below are filed as part of
this report.
© Edgar Online, source Glimpses