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CODI > SEC Filings for CODI > Form 8-K on 9-Jun-2014All Recent SEC Filings

Show all filings for COMPASS DIVERSIFIED HOLDINGS

Form 8-K for COMPASS DIVERSIFIED HOLDINGS


9-Jun-2014

Entry into a Material Definitive Agreement, Termination of a Materia


Item 1.01 Entry into a Material Definitive Agreement.

On June 6, 2014 (the "Closing Date") Compass Group Diversified Holdings LLC (the "Company") and Compass Diversified Holdings (NYSE: CODI) ("Holdings" and, together with the Company, collectively "CODI," "us" or "we"), obtained a $725 million credit facility (the "Credit Facility") led by Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer (the "Agent") for a group of lenders (collectively, the "Lenders"). The Credit Facility provides for
(i) revolving loans, swing line loans and letters of credit (the "Revolving Line of Credit") up to a maximum aggregate amount of $400 million (the "Revolving Loan Commitment"), and (ii) a $325 million term loan (the "Term Loan"). The term loans were issued at an original issuance discount of 99.5%. The Credit Facility was established under a Credit Agreement entered into among the Company, the Agent and the Lenders dated June 6, 2014 (the "Credit Agreement"). The Term Loan requires quarterly payments of $812,500 commencing September 30, 2014 with a final payment of all remaining principal and interest due on June 6, 2021, which is the Term Loan maturity date. All amounts outstanding under the Revolving Line of Credit will become due on June 6, 2019, which is the maturity date of loans advanced under the Revolving Line of Credit and the termination date of the Revolving Loan Commitment. The Credit Facility also permits the Company, prior to the applicable maturity date, to increase the Revolving Loan Commitment and/or obtain additional term loans in an aggregate amount of up to $200 million (the "Incremental Loans"), subject to certain restrictions and conditions. The Term Loan was advanced in full on the Closing Date and the proceeds thereof used in part to refinance certain indebtedness of the Company pursuant to its credit agreement, originally dated as of October 27, 2011, from a group of lenders led by Toronto Dominion (Texas) LLC ("TD"), as agent for all the lenders party thereto (the "Prior Financing Agreement") and to pay fees, original issue discount and expenses incurred in connection with the Credit Agreement. Advances under the Revolving Line of Credit, and made pursuant to any Incremental Loans, will be used to finance working capital, capital expenditures and other general corporate purposes of the Company (including to fund acquisitions of additional businesses, permitted distributions and loans by the Company to its subsidiaries) and, in the case of Incremental Loans that are term loans, to repay amounts outstanding under the Revolving Line of Credit.

The Company may borrow, prepay and reborrow principal under the Revolving Line of Credit from time to time during its term. Advances under the Revolving Line of Credit can be either Eurodollar rate loans or base rate loans. Eurodollar rate revolving loans bear interest on the outstanding principal amount thereof for each interest period at a rate per annum equal to the London Interbank Offered Rate approved by the Agent (the "Eurodollar Rate") for such interest period plus a margin ranging from 2.00% to 2.75%, based on the ratio of consolidated net indebtedness to adjusted consolidated earnings before interest expense, tax expense, and depreciation and amortization expenses for such period (the "Consolidated Leverage Ratio"). Base rate revolving loans bear interest on the outstanding principal amount thereof at a rate per annum equal to the highest of (i) Federal Funds rate plus 0.50%, (ii) the rate of interest in effect for such day as publicly announced from time to time by the Agent as its "prime rate", and (iii) Eurodollar Rate plus 1.00% (the "Base Rate"); plus a margin ranging from 1.00% to 1.75%, based on its Consolidated Leverage Ratio.

Advances under term loans can be either Eurodollar rate loans or base rate loans. Eurodollar rate term loans bear interest on the outstanding principal amount thereof for each interest period at a rate per annum equal to the Eurodollar Rate for such interest period plus 3.25%. Base rate term loans bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus 2.25%. The Eurodollar Rate applicable to both base rate loans and Eurodollar rate loans shall in no event be less than 1.00% at any time. The initial Term Loan was advanced as a Eurodollar rate loan.


The Company will pay to the Agent on a quarterly basis, for the account of each Lender in accordance with its applicable percentage of the Revolving Loan Commitment, a commitment fee equal to the product of (i) a rate ranging from 0.45% to 0.60% per annum, based on its Consolidated Leverage Ratio, times
(ii) the actual daily amount by which the Revolving Loan Commitment exceeds the sum of (A) the outstanding amount of revolving loans plus (B) the outstanding amount of letter of credit obligations. The Company will pay to the Agent on a quarterly basis, for the account of each Lender in accordance with its applicable percentage of the Revolving Loan Commitment, a letter of credit fee equal to a rate ranging from 2.00% to 2.75%, based on its Consolidated Leverage Ratio, times the daily amount available to be drawn under such letters of credit (the "Stated Amount"). The Company will also pay to the Agent letter of credit fronting fees equal to 0.125% per annum with respect to each letter of credit . . .


Item 1.02 Termination of a Material Definitive Agreement.

Simultaneously with entering into the Credit Agreement, on June 6, 2014, the Company terminated the Prior Financing Agreement and repaid all outstanding amounts owing thereunder. The Prior Financing Agreement, originally dated as of October 27, 2011, as amended, was a $605 million secured credit facility
(including incremental loans and commitments subsequent to October 27, 2011)
with TD as agent for the lenders party thereto. The Prior Financing Agreement provided for a $320 million revolving line of credit commitment and a $285 million term loan. The Prior Financing Agreement was secured by all of the assets of the Company, including all of its equity interests in, and loans to, its subsidiaries. As of June 6, 2014, the total amount of principal and accrued interest and fees outstanding under the Prior Financing Agreement was approximately $281.8 million. A copy of the Prior Financing Agreement was filed as Exhibit 10.1 to the Company's Form 8-K filed with the Securities and Exchange Commission on October 27, 2011.




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 above with respect to the Credit Agreement is incorporated herein in its entirety.



Item 8.01 Other Events.

On June 9, 2014 the Company issued a press release announcing its entry into the Credit Agreement, a copy of which is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.



Item 9.01 Financial Statements and Exhibits.

(d)     Exhibits.

10.1    Credit Agreement among Compass Group Diversified Holdings LLC, the
        financial institutions party thereto and Bank of America, N.A., dated as
        of June 6, 2014.

99.1    Press Release dated June 9, 2014.


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