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AWI > SEC Filings for AWI > Form 8-K on 18-Mar-2013All Recent SEC Filings

Show all filings for ARMSTRONG WORLD INDUSTRIES INC | Request a Trial to NEW EDGAR Online Pro

Form 8-K for ARMSTRONG WORLD INDUSTRIES INC


18-Mar-2013

Entry into a Material Definitive Agreement, Creation of a Direct F


Item 1.01 Entry into a Material Definitive Agreement

On March 15, 2013, Armstrong World Industries, Inc. (the "Company"), entered into an amended and restated credit agreement (the "Amended and Restated Credit Agreement") among the Company, the other borrower and guarantors named therein, Bank of America, N.A., as administrative agent and collateral agent, the other lenders party thereto, Barclays Bank PLC and JPMorgan Chase Bank, N.A., as co-syndication agents, Manufacturers and Traders Trust, Crédit Agricole Corporate and Investment Bank, The Bank of Nova Scotia, Citibank, N.A., Goldman Sachs Bank USA, Citizens Bank of Pennsylvania, Suntrust Bank, Bank of Tokyo Mitsubishi UFJ, LTD., Fifth Third Bank, HSBC Bank USA, N.A., TD Bank National Association and US Bank National Association, as co-documentation agents, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities, LLC and Barclays Bank PLC, as joint lead arrangers and joint book managers. The Amended and Restated Credit Agreement amends and restates the amended and restated credit agreement, dated as of November 23, 2010, among the Company, certain subsidiaries of the Company, as the other borrower and guarantors thereunder, Bank of America, N.A., as administrative agent, and the other lenders and institutions from time to time party thereto.

The Amended and Restated Credit Agreement provides the Company with a $250 million revolving credit facility (the "Revolving Credit Facility"), with sublimits for letters of credit and swing-line loans and provides a $550 million term loan A ("Term Loan A") and a $475 million term loan B ("Term Loan B" and together with Term Loan A, the "Term Loans"). The Revolving Credit Facility and the Term Loans are referred to as the "Amended and Restated Credit Facilities." The Revolving Credit Facility and Term Loan A are scheduled to mature on March 15, 2018. Term Loan B is scheduled to mature on March 15, 2020. The Amended and Restated Credit Agreement provides for an uncommitted accordion feature that allows the Company to request the existing lenders or third party financial institutions to provide additional capacity in the form of increased revolving credit commitments, incremental term loans, other revolving credit commitments or a new term loan or loans, in an amount not to exceed the greater of $400 million or up to a consolidated net secured leverage ratio of 2.50 to
1.00. The Amended and Restated Credit Agreement also provides that one of the Company's subsidiaries, Armstrong Wood Products, Inc., will be a co-borrower under the Amended and Restated Credit Facilities.

On March 15, 2013, the signing date of the Amended and Restated Credit Agreement, the Company borrowed the full amount available under the Term Loans, a portion of which was used to repay $1,025,981,060.61 principal amount of existing debt.

Borrowings under the Amended and Restated Credit Facilities will bear interest at a rate per annum equal to an applicable margin plus, at the Company's option, either (1) a base rate determined by reference to the higher of (a) the prime rate of Bank of America, N.A. and (b) the federal funds effective rate plus 1/2 of 1.00% or (2) a LIBOR rate determined by reference to the costs of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs. The LIBOR rate for LIBOR borrowings under Team Loan B will not be less than 1.00% per annum. The initial applicable margin for borrowings under the Revolving Credit Facility and Term Loan A will be 1.50% with respect to base rate borrowings and 2.50% with respect to LIBOR borrowings, with such applicable margins subject to adjustment based on the Company's leverage ratio. The applicable margin for borrowings under Term Loan B will be 1.50% with respect to base rate borrowings and 2.50% with respect to LIBOR borrowings. In addition to paying interest on outstanding principal under the Amended and Restated Credit Agreement, the Company will pay a commitment fee to the lenders under the Revolving Credit Facility in respect of the unutilized commitments thereunder at an initial rate equal to 0.35% per annum, subject to adjustment based on the Company's leverage ratio. The Company must also pay customary letter of credit and agency fees.

The Amended and Restated Credit Agreement requires the Company to prepay outstanding loans, subject to certain exceptions, with (i) 100% of the net cash proceeds of all non-ordinary course asset sales or other


dispositions of property (including casualty and condemnation events) in excess of $25 million in any fiscal year, subject to reinvestment rights and certain other exceptions, (ii) 50% of the Company's excess cash flow, subject to reduction based on the Company's leverage ratio, and (iii) so long as the Company's net leverage ratio is greater than 3.00 to 1.00, 100% of the net cash proceeds of certain funded indebtedness in excess of $200 million. If at any time the aggregate amount of outstanding revolving loans, unreimbursed letter of credit drawings and undrawn letters of credit under the Revolving Credit Facility exceeds the commitment amount, the Company will be required to repay outstanding loans or cash collateralize letters of credit in an aggregate amount equal to such excess, with no reduction of the commitment amount.

The Company may voluntarily reduce the unutilized portion of the commitment amount and prepay outstanding loans under the Revolving Credit Facility and Term Loan A without premium or penalty other than customary "breakage" costs with respect to LIBOR loans. If the Company makes a voluntary prepayment of Term Loan B within six months of March 15, 2013 in connection with any new or additional term loans that have an effective interest rate margin or weighted average yield that is less than the applicable rate for, or weighted average yield of, Term Loan B, the Company must pay a prepayment premium in an amount equal to one percent (1.0%) of the principal amount repaid. Subject to certain conditions, the Company may also offer to make prepayments on a non-pro rata basis to the lenders in respect of the Term Loans at a discount to par value.

A twelve (12) month grace period applies to principal amortization of Term Loan
A. In the last three quarters of 2014 and the first quarter of 2015, each of the quarterly amortization payments of Term Loan A will be in an amount equal to 1.1591% of the original principal amount of Term Loan A. In the last three quarters of 2015 and the first quarter of 2016, each of the quarterly amortization payments of Term Loan A will be in an amount equal to 1.7273% of the original principal amount of Term Loan A. In the last three quarters of 2016 and in 2017, each of the quarterly amortization payments will be in an amount equal to 2.2955% of the original principal amount of Term Loan A. The principal amount outstanding on Term Loan A will be due and payable on March 15, 2018. . . .



Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 is incorporated by reference to this Item 2.03.



Item 7.01 Regulation FD Disclosure.

On March 18, 2013, the Company issued a press release regarding the Amended and Restated Credit Agreement, a copy of which is furnished herewith as Exhibit
99.1. The information being furnished pursuant to Item 7.01 of this Form 8-K and in Exhibit 99.1 shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended ("Exchange Act"), or otherwise be subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.



Item 9.01 Financial Statements and Exhibits

(d) Exhibits.

Exhibit
  No.                                     Description

10.1         Amended and Restated Credit Agreement dated as of March 15, 2013,
             among the Company, the other borrower and guarantors named therein,
             Bank of America, N.A., as administrative agent and collateral agent,
             the other lenders party thereto, Barclays Bank PLC and JPMorgan Chase
             Bank, N.A., as co-syndication agents, Manufacturers and Traders Trust,
             Crédit Agricole Corporate and Investment Bank, The Bank of Nova
             Scotia, Citibank, N.A., Goldman Sachs Bank USA, Citizens Bank of
             Pennsylvania, Suntrust Bank, Bank of Tokyo Mitsubishi UFJ, LTD., Fifth
             Third Bank, HSBC Bank USA, N.A., TD Bank National Association and US
             Bank National Association, as co-documentation agents, and Merrill
             Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities,
             LLC and Barclays Bank PLC, as joint lead arrangers and joint book
             managers.

10.2         Amended and Restated Security Agreement dated as of March 15, 2013, by
             and among the Company, the grantors named therein and Bank of America,
             N.A., as collateral agent.

10.3         Amended and Restated Pledge Agreement dated as of March 15, 2013, by
             and among the Company, the pledgors named therein and Bank of America,
             N.A., as collateral agent.

10.4         Amended and Restated Canadian Pledge Agreement dated as of March 15,
             2013, by and among the Company and Bank of America, N.A., as
             collateral agent.

99.1         Press release dated March 18, 2013.


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