According to an SEC filing, Ferro Corporation, on July 26, entered into a first amendment to a second amended and restated credit agreement with several banks and Credit Suisse, Cayman Islands Branch, as original term loan administrative agent, PNC Bank (as successor by merger to National City Bank), as new term loan administrative agent and as revolving loan administrative agent, and National City Bank, as collateral agent.
The primary effects of the credit agreement first amendment are to:
Amend the permitted indebtedness provisions of the senior credit facility to permit the issuance of up to $300 million of unsecured senior notes of the company;
Exclude swap breakage costs incurred in connection with a prepayment of term loans from the calculation of EBITDA and, as a result, the fixed charge coverage ratio and the leverage ratio;
Amend the mandatory repayment provisions of the senior credit facility to require that the net proceeds of the issuance of senior notes be used to prepay any term loans outstanding under the company's senior credit facility and then to repay outstanding revolving loans. Any remaining net proceeds may be used by the company for general corporate purposes; and
Amend the definition of "change of control" in the senior credit facility to include any change of control, as defined in the instruments governing the senior notes, for so long as any Senior Notes are outstanding.
The company also intends to offer to sell, subject to market and other conditions, $250 million aggregate principal amount of senior notes pursuant to an effective shelf registration statement filed with the SEC.
The company expects to use a portion of the net proceeds from the offering of the senior notes to purchase any and all of its 6.50% convertible senior notes due 2013 in a cash tender offer. The remaining net proceeds from the offering of the senior notes, along with borrowings under the new credit facility, are expected to be used to repay all borrowings outstanding under the Company's existing credit facility. If for any reason the tender offer for the convertible notes is not consummated, the company would use the net proceeds from the offering of the senior notes to repay all borrowings outstanding under its existing credit facility and for general corporate purposes.
Ferro Corporation is a global supplier of technology-based performance materials for manufacturers.
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