| Item 1.01. |
Entry into a Material Definitive Agreement. |
On December 5, 2022, The Timken Company (the “Company”) entered into a Fifth Amended and Restated Credit Agreement (the “Credit Agreement”) with Bank of America, N.A. and KeyBank National Association, as Co-Administrative Agents, KeyBank National Association, as Paying Agent, L/C Issuer and Swing Line Lender, and the other lenders from time to time party thereto (collectively, the “Lenders”). The Credit Agreement amends and restates the Company’s previous revolving credit agreement, dated as of June 25, 2019 (the “Existing Revolving Credit Agreement”), and the proceeds thereof will be used (i) to refinance the Existing Revolving Credit Agreement, (ii) to repay in full all obligations outstanding under that certain Credit Agreement, dated as of September 11, 2018, among the Company, the lenders from time to time party thereto and KeyBank National Association, as administrative agent, consisting of $312,812,500 in outstanding principal plus accrued and unpaid interest thereon, which was originally set to mature on September 11, 2023, and (iii) for general corporate purposes.
The Credit Agreement provides for a $400 million unsecured term loan facility and a $750 million unsecured revolving credit facility. The term loan facility and revolving credit facility each mature on December 5, 2027. The interest rate applicable to the loans under the Credit Agreement is based on grid pricing determined by the Company’s debt rating. In addition, the Company will pay a facility fee based on its debt rating times the aggregate revolving credit commitments of all of the Lenders. The Credit Agreement is not secured by assets of the Company or any of its subsidiaries.
The Credit Agreement contains certain customary representations, warranties and covenants, including financial covenants that require the Company to maintain a consolidated leverage ratio and a consolidated interest coverage ratio in accordance with the limits set forth therein.
The Credit Agreement is subject to customary events of default. If any event of default occurs and is continuing, the lenders may instruct the administrative agent to accelerate amounts due under the Credit Agreement (except for a bankruptcy event of default, in which case such amounts will automatically become due and payable) and exercise other rights and remedies.
A copy of the Credit Agreement is filed as Exhibit 10.1 hereto. The foregoing description of the Credit Agreement does not purport to be complete, and is qualified in its entirety by reference to the full text of the Credit Agreement, which is incorporated by reference herein.
The lenders and the agents (and each of their respective subsidiaries or affiliates) of the Credit Agreement have in the past provided, and may in the future provide, investment banking, cash management, underwriting, lending, commercial banking, trust, leasing services, foreign exchange and other advisory services to, or engage in transactions with, the Company and its subsidiaries or affiliates. These parties have received, and may in the future receive, customary compensation from the Company and its subsidiaries or affiliates, for such services.