STANDARD MOTOR PRODUCTS, INC. : entering into a material definitive agreement, terminating a material definitive agreement, creating a direct financial obligation or an obligation under an off-balance sheet arrangement of a registrant, financial statements and exhibits (Form 8 -K)

Item 1.01. Conclusion of a significant definitive agreement.

On June 1, 2022, Standard Engine Products, Inc. (the “Company”) has entered into a credit agreement with JPMorgan Chase Bank, North America., as administrative agent, and the lenders named therein (the “Credit Agreement”). The credit agreement provides for a $500 million credit facility consisting of a $100 million term loan facility (the “Term Loan”) and a $400 million multi-currency revolving credit facility available in WE Dollars, Euros, Pounds Sterling, Swiss Francs, Canadian Dollars and other currencies agreed upon by the Administrative Agent and the Lenders (the “Revolving Facility”). The Credit Agreement replaces and refinances the existing Credit Agreement, dated October 28, 2015among the company, SMP Motor Products Ltd. and Trumpet Holdings, Inc.as borrowers,
JPMorgan Chase Bank, North America., as administrative agent and lender, and the other lenders named therein (the “2015 Credit Agreement”).

Borrowings under the Credit Agreement will be used to repay all outstanding borrowings under the existing 2015 Credit Agreement and to pay certain fees and expenses incurred under the Credit Agreement and for other general purposes. of the company and its subsidiaries. The term loan is amortized in quarterly installments of 1.25% during each of the first four years and in quarterly installments of 2.5% during the fifth year of the credit agreement. The renewable installation has a $25 million sub-limit for issuing letters of credit and a $25 million sub-limit for borrowing swingline loans. The due date is June 1, 2027. The Company may request up to two one-year extensions of the maturity date.

The Company may, with the agreement of one or more existing lenders or other financial institutions that are not currently parties to the credit agreement, increase the commitments of the revolving facility or obtain additional term loans from a total amount not exceeding (x) the greater of the following amounts: (i) $168 million and (ii) 100% of consolidated EBITDA for the last four quarters ended prior to that date, plus (y) the amount of any voluntary prepayment of term loans, plus (z) an unlimited amount so long as, immediately after having given effect in this respect, the pro forma net senior leverage ratio (as defined in the credit agreement) does not exceed 2.5 to 1.0.

Loans in WE The dollars bear interest, at the option of the Company, at an annual rate equal to the forward SOFR plus 0.10% plus an applicable margin, or at an alternative base rate plus an applicable margin, when the alternative base rate is the higher between the prime rate, the effective federal funds rate plus 0.50%, and one-month forward SOFR plus 0.10% plus 1.00%. Alternative currency borrowings bear interest at certain variable alternative currency rates plus, in each case, an applicable margin. The applicable margin for Term Reference Loans ranges from 1.0% to 2.0%, and the applicable margin for Alternate Base Rate Loans ranges from 0% to 1.0%, in each case, depending the total net leverage ratio of the Company and its restricted subsidiaries. . The Company may choose interest periods of one, three or six months for SOFR term loans and certain alternative exchange rate loans. Interest is payable at the end of the chosen interest period, but at least quarterly.

The Company will also pay the lenders under the Revolving Facility a commitment fee on the actual daily excess of each lender’s commitment over its outstanding credit exposure under the Revolving Facility. This commitment fee will vary between 0.15% and 0.25% per annum, and is also based on the total net leverage ratio of the Company and its restricted subsidiaries. The Company may prepay the Revolving Loans and terminate the Revolving Loan Commitments, in whole or in part, at any time without premium or penalty, subject to certain conditions.

————————————————– ——————————

The Company’s obligations under the Credit Agreement are guaranteed by its principal national subsidiaries (each, a “Guarantor”), and the Company’s and any Guarantor’s obligations are secured by a perfected first priority charge on the substantially all existing and future personal property owned by the Company and each Guarantor, subject to certain exceptions. The ancillary security described above also secures certain banking service obligations and interest rate swaps and foreign exchange obligations or other hedging obligations of the Company owed to one of the then existing lenders or one of its companies. affiliates. Along with the Company entering into the Credit Agreement, the Company also entered into an interest rate swap agreement with Wells Fargo Bank, North AmericaCo-Syndication Agent and lender under the Credit Agreement, the $100 million borrowings under the credit agreement to manage exposure to interest rate fluctuations.

The Credit Agreement contains customary covenants limiting, among other things, the formation of additional indebtedness, the creation of liens, mergers, consolidations, liquidations and dissolutions, sales of assets, dividends and other payments relating to shareholdings, acquisitions, investments, loans and guarantees, subject, in each case, to the usual exceptions, thresholds and baskets. The Credit Agreement also contains customary events of default.

The Administrator and the other parties to the Credit Agreement have provided in the past, and may provide in the future, certain commercial banking, financial advisory, investment banking and other services for the Company and its affiliates in the normal course of their activities, so that they have received and may continue to receive the usual compensation and expense reimbursements.

On June 2, 2022, the Company issued a press release announcing its conclusion of the Credit Agreement. A copy of this press release is attached as Exhibit 99.1 hereto.

The description of the Credit Agreement set forth above is qualified in its entirety by reference to the Credit Agreement filed as Schedule 10.1 hereto and incorporated herein by reference.

Section 1.02. Termination of a Material Definitive Agreement.

On June 1, 2022in parallel with the Company’s conclusion of the credit agreement described in point 1.01 above, the company terminated the existing credit agreement of 2015, which provided for a $300 million Revolving credit facility. The information set out in point 1.01 above is incorporated by reference in this point 1.02.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under a

           Off-Balance Sheet Arrangement of a Registrant.



The information set out in point 1.01 above is incorporated by reference in this point 2.03.

————————————————– ——————————

Section 9.01. Financial statements and supporting documents.



 (d) Exhibits.



10.1     Credit Agreement, dated as of June 1, 2022, among Standard Motor
         Products, Inc., as Borrower, JPMorgan Chase Bank, N.A., as
         Administrative Agent, Bank of America, N.A. and Wells Fargo
         Bank, National Association, as Co-Syndication Agents, J.P.
         Morgan Securities LLC, as Sustainability Structuring Agent,
         JPMorgan Chase Bank, N.A., as Sole Bookrunner, JPMorgan Chase
         Bank, N.A., BofA Securities, Inc. and Wells Fargo Securities,
         LLC, as Joint Lead Arrangers, and the lenders named therein.

99.1     Press release dated June 2, 2022 announcing a new credit
         facility.

104      Cover Page Interactive Data File--the cover page XBRL tags are
         embedded within the Inline XBRL document.

© Edgar Online, source Previews

Comments are closed.