Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of the Registrant.
On April 1, 2022, W. R. Berkley Corporation (the “Company”) entered into a five-year revolving credit facility pursuant to a credit agreement (the “Credit Agreement”) among the Company, as borrower, each lender from time to time party thereto, each of Credit Suisse AG, New York Branch, JPMorgan Chase Bank, N.A. and Morgan Stanley Senior Funding, Inc., as Syndication Agents, and Bank of America, N.A., as Administrative Agent, Several L/C Agent and Fronting L/C Issuer. Capitalized terms used but not defined herein have the meanings ascribed to them in the Credit Agreement.
The Credit Agreement provides for revolving, unsecured borrowings up to an aggregate of $300,000,000 with a $50,000,000 sublimit for letters of credit. The Company may increase the amount available under the facility to a maximum of $500,000,000, subject to obtaining lender commitments for the increase and other customary conditions set forth in the Credit Agreement. Borrowings under the Credit Agreement may be used for working capital and other general corporate purposes. All borrowings under the Credit Agreement must be repaid by April 1, 2027, except that letters of credit outstanding on that date may remain outstanding until April 1, 2028 (or such later date approved by all lenders).
The Company pays interest on balances outstanding under the facility and a fee for letters of credit issued under the facility. Borrowings bear interest at an annual rate equal to (i) either Term SOFR or the Base Rate plus (ii) an applicable margin. The Company is also required to pay the lenders a quarterly commitment fee on the average unused amount of the facility.
The Credit Agreement contains representations and warranties and covenants that are customary for facilities of this type. The Credit Agreement includes financial covenants that require that the Company (i) not exceed a maximum leverage ratio and (ii) maintain a minimum amount of consolidated net worth. Amounts due under the Credit Agreement may be accelerated upon an Event of Default if not otherwise cured or waived.
The foregoing description of the Credit Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Credit Agreement, which is attached hereto as Exhibit 10.1 and incorporated by reference herein.