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Item 1.01
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Entry into a Material Definitive Agreement.
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Sixth Amendment to Guaranty Agreement
On May 14, 2020, Helen of Troy Limited (the “Company”) and certain of the Company’s subsidiaries entered into the Sixth Amendment to Guaranty Agreement (the “Amended Guaranty”) in favor of Bank of America, N.A. The Amended Guaranty amends the Guaranty Agreement (as amended, the “Guaranty Agreement”), dated March 1, 2013, made by the Company and certain of the Company’s subsidiaries in favor of Bank of America, N.A. and other lenders.
The Guaranty Agreement requires the maintenance of certain financial covenants, including a maximum Leverage Ratio and a minimum Interest Coverage Ratio (as defined in the Guaranty Agreement), and includes customary representations and warranties, and covenants, including, among other things, covenants restricting or limiting the Company and its subsidiaries, except under certain conditions set forth therein, from (1) incurring liens on any of their respective properties, (2) making certain types of investments, (3) incurring additional indebtedness, and (4) assigning or transferring certain licenses. Certain of the representations and warranties, and covenants in the Guaranty Agreement were amended by the Amended Guaranty to include or modify certain baskets, exceptions and other customary provisions.
Fifth Supplemental Trust Indenture
As previously disclosed, on March 20, 2013, Kaz USA, Inc. (“Kaz USA”), a wholly owned subsidiary of the Company, entered into that certain Loan Agreement, dated as of March 1, 2013 (the “Loan Agreement”), by and between Kaz USA and Mississippi Business Finance Corporation (the “MBFC”) in connection with the issuance by MBFC of up to $38,000,000 of taxable industrial development revenue bonds (the “Bonds”). The Bonds were issued under a Trust Indenture, dated as of March 1, 2013 (as supplemented, the “Indenture”), by and between MBFC and U.S. Bank National Association, as trustee (the “Trustee”), and are payable from payments made by Kaz USA pursuant to the Loan Agreement.
On May 14, 2020, MBFC and the Trustee entered into that certain Fifth Supplemental Trust Indenture, effective May 14, 2020 (the “Fifth Supplemental Indenture”), with the consent of Kaz USA and Bank of America, N.A., the purchaser of the Bonds. The Base Rate (as defined in the Indenture) and Eurodollar Rate (as defined in the Indenture) each was amended. As amended by the Fifth Supplemental Indenture, the Bonds and the related loans to Kaz USA will bear interest at a Base Rate or Eurodollar Rate plus a margin based on the Net Leverage Ratio (as defined in the Fifth Supplemental Indenture). The Fifth Supplemental Indenture amended the pricing grid for the Eurodollar and Base Rate margins. Prior to the Fifth Supplemental Indenture, the pricing grid for the Eurodollar Rate and Base Rate margins under the Indenture was as follows:
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Pricing Level
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Leverage Ratio
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Eurodollar Rate Margin for the Loan
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Base Rate Margin for the Loan
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I
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Less than 1.50 to 1.00
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1.000%
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—%
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II
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Greater than or equal to 1.50 to 1.00 but less than 2.00 to 1.00
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1.250%
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0.250%
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III
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Greater than or equal to 2.00 to 1.00 but less than 2.50 to 1.00
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1.500%
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0.500%
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IV
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Greater than or equal to 2.50 to 1.00 but less than 3.00 to 1.00
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1.750%
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0.750%
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V
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Greater than or equal to 3.00 to 1.00
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2.000%
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1.000%
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As amended by the Fifth Supplemental Indenture, the new pricing grid for the Eurodollar and Base Rate margins under the Indenture is as follows:
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Pricing Level
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Leverage Ratio
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Eurodollar Rate Margin for the Loan
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Base Rate Margin for the Loan
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I
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Less than 1.50 to 1.00
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1.000%
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—%
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II
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Greater than or equal to 1.50 to 1.00 but less than 2.00 to 1.00
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1.125%
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0.125%
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III
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Greater than or equal to 2.00 to 1.00 but less than 2.50 to 1.00
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1.375%
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0.375%
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IV
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Greater than or equal to 2.50 to 1.00 but less than 3.00 to 1.00
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1.625%
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0.625%
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V
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Greater than or equal to 3.00 to 1.00 but less than 3.50 to 1.00
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1.875%
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0.875%
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VI
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Greater than or equal to 3.50 to 1.00
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2.000%
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1.000%
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The foregoing descriptions of the Amended Guaranty and the Fifth Supplemental Indenture do not purport to be complete and are qualified in their entirety by reference to the Amended Guaranty that is filed with this Current Report on Form 8-K as Exhibit 10.1 and the Fifth Supplemental Trust Indenture that is filed with this Current Report on Form 8-K as Exhibit 10.2, each of which is incorporated by reference herein.