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(Former
name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Securities registered pursuant to Section 12(b) of the Act:
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iCommon Stock, par value $0.01 per
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of
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Item 1.01. Entry into a Material Definitive Agreement.
Term Loans Paydown and Refinancing
On December 18, 2023, Element Solutions Inc (the "Company"), MacDermid, Incorporated ("MacDermid," and together with the
Company, the "Borrowers"), certain subsidiaries of the Company party thereto, Citibank, N.A., as collateral agent and administrative agent (the "Agent"), and the lenders party thereto, entered into an Amendment No. 8 and Joinder to Credit Agreement ("Amendment No. 8"), which amended that certain credit agreement, dated as of January 31, 2019 (as amended and/or supplemented from time to time, the “Credit Agreement”), among the Borrowers, certain subsidiaries of the Company from time to time parties thereto, the Agent and the lending institutions
from time to time parties thereto.
Amendment No. 8 provided for the repayment in full of the Company's existing $150 million tranche A term loans (the "Existing TLAs") and the refinancing of its existing $1,105 million tranche B term loans (the "Existing TLBs") by creating a new tranche B-2 of term loans denominated in U.S. dollars in an aggregate principal amount of $1,150 million (the "Refinanced TLBs"). The Refinanced TLBs will mature on December 18, 2030. Concurrently with the creation of the Refinanced TLBs, the proceeds of the $1,150 million of Refinanced TLBs, together with cash on hand, were used to fully prepay both the Existing TLAs and the Existing TLBs.
Borrowings under the Refinanced TLBs bear interest at a rate
per annum based on the type of loan selected by the Company: (a) for Term SOFR (as defined in the Credit Agreement) loans, a Term SOFR rate, subject to a rate floor of 0, plus a spread of 2.00%, and (b) for base rate loans, a rate equal to the highest of the applicable (i) Federal Funds rate plus 0.50%, (ii) prime rate as quoted by The Wall Street Journal, and (iii) Term SOFR rate for a one-month interest period, plus a spread of 1.00%.
For the initial borrowing period, the interest rate applicable to the Refinanced TLBs is Term SOFR, plus a spread of 2.00% per annum.
Except as set forth in Amendment No. 8 and above, the Refinanced TLBs have substantially the same terms as the Existing TLBs and are otherwise subject to the provisions of the Credit Agreement. Certain restricted subsidiaries
of the Borrowers acting as guarantors under the Credit Agreement (the "Guarantors") guarantee the Borrowers’ obligations under the Refinanced TLBs. The Refinanced TLBs are also secured by the collateral pledged by the Borrowers and the Guarantors under that certain Pledge and Security Agreement, dated as of January 31, 2019, among the Borrowers, the Guarantors and the predecessor agent, which is attached hereto as Exhibit 10.8 and incorporated herein by reference.
The foregoing descriptions of Amendment No.
8 and the Credit Agreement do not purport to be complete and are qualified in their entirety by reference to the full texts of Amendment No. 8, which is attached hereto as Exhibit 10.1, and the Credit Agreement, dated as of January 31, 2019, which is attached hereto as Exhibit 10.2, as amended by Amendments No. 7, 6, 4, 3 and 1, which are included herewith as Exhibits 10.3,
10.4, 10.5, 10.6 and 10.7, respectively, and which are all incorporated herein by reference. Neither Amendment No. 2 nor Amendment No. 5 to the Credit Agreement was
a material amendment.
Swap Transactions
In connection with the funding of the Refinanced TLBs, on December 18, 2023, the Company liquidated existing interest rate and cross-currency swap agreements initially scheduled to mature in 2024 and 2026. The Company subsequently entered into new interest rate and cross-currency swap transactions (the "Swaps") with certain banks included in the syndicate of the Refinanced TLBs (the "Hedge Counterparties").
The Swaps, which are governed by ISDA Master Agreements with each of the Hedge Counterparties, were intended to effectively convert
approximately $760 million of the Refinanced TLBs, a U.S. dollar denominated debt obligation, into fixed-rate euro-denominated debt at a fixed EUR all-in rate of 4.31% during the term of the Swaps, which mature in 2028. The balance of approximately $390 million remains subject to existing swaps scheduled to mature in 2025.
Item 2.03. Creation of a Direct Financial Obligation.
The information set forth under Item 1.01 regarding Amendment No. 8 and the Swaps is incorporated by reference herein.
Item 5.02. Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(b) On December 20, 2023, in connection with planned leadership transition, Michael Goralski, a named executive officer of the Company, retired as Executive Vice President, Head of Industrial & Specialty, effective December 31, 2023. In accordance with the Company's established succession and growth plans, the responsibilities within his
position are being assumed by previously designated leaders.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are filed or furnished herewith:
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
