Item 1.01
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Entry into a Material Definitive Agreement.
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364-Day Credit Agreement
On April 17, 2020, Henry Schein, Inc. (the “Company”) entered into a new $700 million credit agreement (the “364-Day Credit Agreement”). This new facility, which matures in April 2021, is unsecured and is comprised of a $500 million term facility and a $200 million revolving facility. The interest rates, pricing and fees under the 364-Day Credit Agreement fluctuate based on net leverage ratio, as defined in 364-Day Credit Agreement. The facility’s joint lead arrangers and joint bookrunners were JPMorgan Chase Bank, N.A. and U.S. Bank National Association. The Company plans to use its new credit facility for working capital and general corporate purposes, including, but not limited to, permitted refinancing of existing indebtedness.
The 364-Day Credit Agreement contains customary representations, warranties and affirmative covenants. The 364-Day Credit Agreement also contains customary negative covenants, subject to negotiated exceptions on (i) liens, (ii) indebtedness, (iii) significant corporate changes, including mergers, (iv) dispositions and (v) certain restrictive agreements. The 364-Day Credit Agreement also contains customary events of default, such as payment defaults, cross-defaults to other material indebtedness, bankruptcy and insolvency, the occurrence of a defined change in control, or the failure to observe the negative covenants and other covenants related to the operation of the Company’s business.
The above description of the 364-Day Credit Agreement is not complete and is qualified in its entirety by the actual terms of the 364-Day Credit Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
Second Amendment to Revolving Credit Facility
On April 17, 2020, the Company entered into an amendment (the “Second Amendment”) to its existing $750 million revolving credit agreement, dated as of April 18, 2017, and amended by the first amendment, dated as of June 29, 2018, by and among the Company, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders and other agents party thereto, to, among other things, (i) modify the financial covenant from being based on total leverage ratio to net leverage ratio, (ii) adjust the pricing grid to reflect the net leverage ratio calculation, (iii) increase the maximum maintenance leverage ratio through March 31, 2021, and (iv) make certain other changes conforming to the 364-Day Credit Agreement.
The above description of the Second Amendment is not complete and is qualified in its entirety by the actual terms of the Second Amendment, a copy of which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.