ARTICLE 1.01. CONCLUSION OF A DEFINITIVE MATERIAL AGREEMENT.
At March 25, 2022, Owens-Illinois Group, Inc. (“OI Group“), a direct subsidiary wholly owned by OI Glass, Inc. (the “Company”) has entered into a credit agreement and a syndicated credit agreement with Wells Fargo Bank, National Associationas an administrative agent, Owens-Illinois General Inc., as Agent for the Borrowers, and the other Agents, Arrangers and Lenders named therein (the “Credit Agreement”). The Credit Agreement fully refinances OI Group Third Amended and Restated Credit Agreement and Syndicated Credit Agreement, dated June 25, 2019 (the “Preliminary Credit Agreement”). The credit agreement provides for up to
$2.8 billion borrowings under term loans, revolving credit facilities and a deferred draw term loan facility. The deferred draw term loan facility allows a one-time borrowing of up to $600.0 millionthe proceeds of which, if borrowed, will be used, in addition to other consideration paid by the Company and/or its subsidiaries, to fund directly or indirectly a trust to be established in connection with the plan of reorganization (the “Plan” ) Proposed by Paddock Enterprises, LLC (“Paddock”) and certain other parties in the Paddock Chapter 11 matter. If approved and implemented, the plan will permanently resolve all current and future asbestos-related claims (as defined in the plan) against Paddock, and protect the company and its subsidiaries from such claims, by pursuant to Section 524(g) of the we Bankruptcy code. The term loans mature and the revolving credit facilities terminate, in March 2027. Deferred draw term loans, if borrowed, mature within December 2023. Borrowings under the Credit Agreement are secured by certain security interests OI Group and some of its subsidiaries.
The Credit Agreement contains various covenants that restrict, among other things and subject to certain exceptions, the ability to OI Group incur certain liens, make certain investments, become liable under contingent liabilities in certain defined cases only, make limited payments, make certain sales of assets within guidelines and limits, engage in certain affiliate transactions, participate in sale and leaseback financing agreements, modify its fundamentals and modify certain subordinated debt securities.
The credit agreement also contains a financial maintenance clause, a guaranteed leverage ratio, calculated by dividing the consolidated net indebtedness which is then guaranteed by liens on property or assets of the company and certain of its subsidiaries by the ‘Consolidated EBITDA, as each term is defined and as described in the credit agreement. The secured leverage ratio could limit the ability of
OI Group to undertake additional financings or acquisitions to the extent that such financings or acquisitions would cause the guaranteed leverage ratio to exceed the specified maximum.
Failure to comply with these covenants and restrictions could result in an event of default under the Credit Agreement. In such an event, OI Group could not request borrowings under the revolving credit facility, and all amounts outstanding under the credit agreement, together with accrued interest, could then be declared immediately due and payable. If an event of default occurs under the Credit Agreement and the lenders cause all debt obligations outstanding under the Credit Agreement to become due, this would trigger a default under a number of other outstanding debt securities and could result in an acceleration of the obligations associated with such debt securities.
The Total Leverage Ratio (as defined in the Credit Agreement) determines pricing under the Credit Agreement. The interest rate on borrowings under the credit agreement is, at OI Group option, the base rate, the forward SOFR or, for non-US dollar denominated borrowings only, the Eurocurrency rate (each as defined in the credit agreement), plus an applicable margin. The applicable margin ranges from 1.00% to 1.75% for SOFR term loans and Eurocurrency rate loans and from 0.00% to 0.75% for base rate loans. In addition, a commitment fee is payable on unused revolving credit facility commitments ranging from 0.20% to 0.35% per annum linked to the total leverage ratio.
Certain lenders under the credit agreement were parties to the prior credit agreement. On the closing date of the Credit Agreement, OI Group used the proceeds of a portion of the borrowings available thereunder to repay outstanding loans and related fees and expenses related to the termination of the prior credit agreement.
The foregoing description in this current report of the Credit Agreement is not intended to be a complete description of the Credit Agreement and related documents. The description is qualified in its entirety by the full text of the documents which are attached as Exhibits and incorporated by reference into this current report.
ARTICLE 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 is incorporated herein by reference.
SECTION 9.01. FINANCIAL STATEMENTS AND RECORDS.
4.1* Credit Agreement and Syndicated Facility Agreement, dated March 25,
2022, by and among the Borrowers named therein, Owens-Illinois General
Inc., as Borrowers' Agent, Wells Fargo Bank, National Association, as
Administrative Agent, and the other Agents, Arrangers and Lenders
4.2* Intercreditor Agreement, dated as of March 25, 2022, by and among
Wells Fargo Bank, National Association, as Administrative Agent and
Collateral Agent for the lenders party to the Credit Agreement (as
defined therein), and any other parties thereto.
4.3* Pledge Agreement, dated as of March 25, 2022, between Owens-Illinois
Group, Inc., Owens-Brockway Packaging, Inc., and Wells Fargo Bank,
National Association, as Collateral Agent and any other parties
4.4* Security Agreement, dated as of March 25, 2022, between
Owens-Illinois Group, Inc., each of the direct and indirect
subsidiaries of Owens-Illinois Group, Inc. signatory thereto, and
Wells Fargo Bank, National Association, as Collateral Agent.
104 Cover Page Interactive Data File (formatted as inline XBRL and
contained in Exhibit 101)
*Certain attachments and exhibits have been omitted in accordance with SK Rule 601(a)(5).
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