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Power Solutions International, Inc. (the “Company” or “PSI”) amended its $130 million uncommitted senior secured revolving credit agreement (the “Fourth Amended and Restated Credit Agreement”), with Standard Chartered Bank, as administrative agent (“Standard Chartered”), and the lenders party thereto from time to time. The Fourth Amended and Restated Credit Agreement extends the maturity date of loans outstanding under its previous credit facility to the earlier of March 21, 2025 or the demand of Standard Chartered. The Fourth Amended and Restated Credit Agreement has an outstanding principal balance of $50 million with no principal payments scheduled as of the date of this release._x000D_
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The Fourth Amended and Restated Credit Agreement is subject to customary events of default and covenants, including minimum consolidated EBITDA and Consolidated Interest Coverage Ratio covenants for the second and third quarters of 2024. Borrowings under the Fourth Amended and Restated Credit Agreement will incur interest at either the alternate base rate or the Secured Overnight Financing Rate (“SOFR”) plus 3.45% per annum._x000D_
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The obligations under the Fourth Amended and Restated Credit Agreement are unconditionally guaranteed, on a joint and several basis, by certain wholly-owned, existing and subsequently acquired or formed direct and indirect domestic subsidiaries of the Company, subject to customary exceptions. The obligations under the Fourth Amended and Restated Credit Agreement are secured by substantially all assets of the Company and the Company’s wholly-owned subsidiaries._x000D_
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In connection with the Fourth Amended and Restated Credit Agreement, on March 22, 2024, the Company also amended one of its existing shareholder’s loan agreements with its majority stockholder, Weichai America Corp. (“Weichai”), to among other things, extend the maturity date thereof. The Company and Weichai agreed not to renew the first shareholder’s loan agreement, which expired on March 24, 2024, providing the Company with a $130.0 million subordinated loan under which Weichai was obligated to advance funds solely for purposes of repaying outstanding borrowings under the Third Amended and Restated Uncommitted Revolving Credit Agreement dated as of March 24, 2023 among the Company, certain subsidiaries of the Company party thereto, Standard Chartered, as administrative agent, and the lenders party thereto from time to time if the Company was unable to pay such borrowings. The shareholder’s loan agreement providing the Company with a $30 million subordinated loan at the discretion of Weichai at an annual interest rate equal to SOFR plus 4.05% per annum (the “$30 Million Second Amended and Restated Shareholder’s Loan Agreement”) was amended to extend the maturity date from March 31, 2024 to March 31, 2025. Further, if the applicable term SOFR is negative, the interest rate per annum shall be deemed to be 4.05% per annum. If the interest rate for any loan is lower than Weichai’s borrowing cost, the interest rate for such loan shall be equal to Weichai’s borrowing cost plus 1%. The $30 Million Second Amended and Restated Shareholder’s Loan Agreement is subject to customary events of default and covenants. The Company has covenanted to secure any amounts borrowed under the $30 Million Second Amended and Restated Shareholder’s Loan Agreement upon payment in full of all amounts outstanding under the Fourth Amended and Restated Credit Agreement._x000D_
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As of March 22, 2024, the Company had borrowed approximately $19.8 million under the $30 Million Second Amended and Restated Shareholder’s Loan Agreement._x000D_
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The Company also previously entered into two other loan agreements with Weichai, including the $25 million Second Amended and Restated Shareholder’s Loan Agreement (the “$25 Million Second Amended Shareholder’s Loan Agreement”) and the $50 Million Second Amended and Restated Shareholder’s Loan Agreement (the “$50 Million Second Amended Shareholder’s Loan Agreement”). The $25 Million Second Amended Shareholder’s Loan Agreement will mature on May 20, 2024 and the $50 Million Second Amended Shareholder’s Loan Agreement will mature on November 30, 2024. The Company intends to work with Weichai to extend both the $25 Million Second Amended Shareholder’s Loan Agreement and the $50 Million Second Amended Shareholder’s Loan Agreement as the maturity date of each agreement approaches. As of March 22, 2024, both the $25 Million Second Amended Shareholder’s Loan Agreement and the $50 Million Second Amended Shareholder’s Loan Agreement have been fully drawn.
Forward for Specialty Finance
