Item 1.01 Entry into a Material Definitive Agreement.
Credit Agreement
On October 5, 2020 (the “Closing Date”),
Spirit AeroSystems, Inc. (“Spirit”), a direct wholly-owned subsidiary of Spirit AeroSystems Holdings, Inc. (the “Company”), entered
into a term loan credit agreement (the “Credit Agreement”) providing for a $400 million senior secured term loan
B credit facility with the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent. On
the Closing Date, Spirit borrowed the full $400 million of initial term loans available under the Credit Agreement. The
Credit Agreement also permits Spirit to request one or more incremental term facilities in an aggregate principal amount not
to exceed (x) in the case of any incremental facility that is secured on a pari passu basis with the Credit Agreement,
the greater of (a) $950 million and (b) such other amount, so long as on a pro forma basis after giving effect to the
incurrence of such indebtedness and the use of proceeds thereof, the first lien secured net leverage ratio does not exceed
3.25 to 1.00; and (y) in the case of any incremental facility that is secured on a junior basis to the Credit Agreement, the
greater of (a) $500 million and (b) such other amount, so long as on a pro forma basis after giving effect to the incurrence
of such indebtedness and the use of proceeds thereof, the secured net leverage ratio does not exceed 5.00 to 1.00. Closing
Date borrowings under the Credit Agreement will be used for general corporate purposes.
The Credit Agreement will mature on January 15, 2025. The Credit
Agreement will amortize in equal quarterly installments at a rate of 1.00% per annum of the original principal amount thereof,
with the remaining balance due at final maturity. Interest on borrowings under the Credit Agreement will initially accrue at the
Eurodollar rate plus an applicable margin equal to 5.25%.
The obligations under the Credit Agreement are guaranteed by
the Company and Spirit AeroSystems North Carolina, Inc., a wholly-owned subsidiary of the Company (“Spirit NC”), and each existing and future, direct and indirect, wholly-owned material domestic subsidiary of the
Company, subject to certain customary exceptions. The obligations are secured by a first-priority lien with respect to substantially
all assets of Spirit and the guarantors, subject to certain exceptions.
The Credit Agreement contains usual and customary affirmative
and negative covenants for facilities and transactions of this type and that, among other things, restrict the Company and its
restricted subsidiaries’ ability to incur additional indebtedness, create liens, consolidate or merge, make acquisitions
and other investments, guarantee obligations of third parties, make loans or advances, declare or pay certain dividends or distributions
on the Company’s stock, redeem or repurchase shares of the Company’s stock, engage in transactions with affiliates
and enter into agreements restricting the Company’s subsidiaries’ ability to pay dividends or dispose of assets. These
covenants are subject to a number of qualifications and limitations.
The Credit Agreement provides for customary events of default,
including, but not limited to, failure to pay principal and interest, failure to comply with covenants, agreements or conditions,
and certain events of bankruptcy or insolvency involving the Company and its material subsidiaries.
The description of the Credit Agreement in this Current Report
on Form 8-K does not purport to be complete and is qualified in its entirety by reference to the full text of the Credit Agreement,
which is filed as Exhibit 10.1 hereto and incorporated herein by reference.
Indenture
On the Closing Date, Spirit entered into an Indenture (the
“Indenture”), by and among Spirit, the Company and Spirit NC, as guarantors (together with the Company, the “Guarantors”),
and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent, in connection with Spirit’s offering
of $500,000,000 aggregate principal amount of its 5.500% Senior Secured First Lien Notes due 2025 (the “Notes”).
The Notes were issued and sold in a private placement to qualified
institutional buyers pursuant to Rule 144A under the U.S. Securities Act of 1933, as amended (the “Securities Act”),
and in offshore transactions to non-U.S. persons pursuant to Regulation S under the Securities Act.
The Notes mature on January 15, 2025 and bear interest at a
rate of 5.500% per year payable semiannually in cash in arrears on January 15 and July 15 of each year. The first interest payment
date is January 15, 2021.
The Notes are guaranteed by the Company and Spirit NC, and
each existing and future, direct and indirect, wholly-owned material domestic subsidiary of the Company, subject to certain customary
exceptions. The Notes are secured by a first-priority lien with respect to substantially all assets of Spirit and the guarantors,
subject to certain exceptions.
Spirit may redeem some or all of the Notes, at its option,
at any time on or after October 15, 2022, at the following redemption prices (expressed as percentages of principal amount), plus
accrued and unpaid interest, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning on
October 15 of each of the years indicated below:
|
Year
|
|
Redemption
Price
|
|
|
2022
|
|
|
102.750
|
%
|
|
2023 and thereafter
|
|
|
100.000
|
%
|
At any time prior to October 15, 2022, Spirit may redeem some
or all of the Notes at a price equal to 100% of the aggregate principal amount of the Notes to be redeemed, plus a “make-whole”
premium and accrued and unpaid interest, if any, to the redemption date. In addition, at any time on or prior to October 15, 2022,
Spirit may, at its option, on one or more occasions, redeem up to 40% of the aggregate principal amount of the Notes with the
net cash proceeds of certain equity offerings at a price equal to 105.500% of the principal amount of the Notes to be redeemed,
plus accrued and unpaid interest, if any, to the redemption date. Upon the occurrence of certain change of control events during
a period when the change of control offer to purchase provisions under the Indenture apply, Spirit must offer to repurchase the
Notes at a price of 101% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the purchase
date.
The Indenture contains covenants that limit Spirit’s,
the Company’s and the Company’s subsidiaries’ ability, subject to certain exceptions and qualifications, to
incur indebtedness secured by liens, enter into sale and leaseback transactions, make restricted payments and investments and
enter into certain mergers or consolidations and transfer substantially all of the Company and its subsidiaries’ assets.
These covenants are subject to a number of qualifications and limitations. In addition, the Indenture provides for customary events
of default.
The description of the Indenture in this Current Report on
Form 8-K does not purport to be complete and is qualified in its entirety by reference to the full text of the Indenture, which
is filed as Exhibit 4.1 hereto and incorporated herein by reference.
Supplemental Indenture
On the Closing Date, Spirit entered into a Fourth Supplemental
Indenture (the “Supplemental Indenture”), by and among Spirit, the Company, Spirit NC and The Bank of New York Mellon
Trust Company, N.A., as trustee in connection with Spirit’s 3.850% Senior Notes due 2026 (the “2026 Notes”).
Under the Supplemental Indenture, the holders of the 2026 Notes were granted security on an equal and ratable basis with the holders
of the Notes and the secured parties under the Credit Agreement.
The description of the Supplemental Indenture in this Current
Report on Form 8-K does not purport to be complete and is qualified in its entirety by reference to the full text of the Supplemental
Indenture, which is filed as Exhibit 4.3 hereto and incorporated herein by reference.