UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
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| Item 1.01 | Entry into a Material Definitive Agreement. |
Amendment of Credit Agreement
On March 22, 2024, Leggett & Platt, Incorporated (the “Company,” “us,” or “we”) entered into an Amendment Agreement relating to the Fourth Amended and Restated Credit Agreement dated as of September 30, 2021, as amended December 16, 2022 (the “Credit Agreement”), among us, JPMorgan Chase Bank, N.A., as administrative agent (“JPMorgan”), and the Lenders party thereto (the “Amendment Agreement”). The Amendment Agreement is attached as Exhibit 10.1 and is incorporated by reference into this Item 1.01. The Amendment Agreement includes as Annex I a marked version of the Credit Agreement. Capitalized terms used but not defined herein have the meanings set forth in the Credit Agreement.
Prior to the Amendment Agreement, the Leverage Ratio covenant required the Company to maintain as of the last day of each fiscal quarter (i) Consolidated Funded Indebtedness minus the lesser of: (A) Unrestricted Cash, or (B) $750 million to (ii) Consolidated EBITDA for the four consecutive trailing quarters, such ratio not being greater than 3.50 to 1, provided, however, subject to certain limitations, if the Company has made a Material Acquisition in any fiscal quarter, at the Company’s election, the maximum Leverage Ratio shall be 4.00 to 1 for the fiscal quarter during which such Material Acquisition was consummated and the next three consecutive fiscal quarters.
The Amendment Agreement increased the Leverage Ratio covenant from 3.50 to 1, to 4.00 to 1 for each quarter-end beginning March 31, 2024 and ending June 30, 2025. The Leverage Ratio covenant will revert to 3.50 to 1 for the quarter ending September 30, 2025 and thereafter until maturity. Also, the provision permitting a temporary increase in the maximum Leverage Ratio in the event of a Material Acquisition will not apply unless the acquisition occurs after June 30, 2025.
In addition, the Amendment Agreement suspended the Company’s right to borrow Canadian Dollars under the Credit Agreement as a result of the expected cessation of the Canadian Dollar Offered Rate, or CDOR, as the benchmark interest rate for such Loans.
The Credit Agreement serves as back-up for our commercial paper program. As of the date of this filing, the Company is in compliance with all provisions of the Credit Agreement, and has no Borrowing and no outstanding Letters of Credit under the Credit Agreement. Our borrowing capacity under the Credit Agreement may materially fluctuate each quarter based on our trailing 12-month Consolidated EBITDA, Unrestricted Cash, debt levels, and Leverage Ratio requirements at the time.
General Terms of the Credit Agreement
The Credit Agreement is a multi-currency credit facility providing us the ability, from time to time, to borrow, repay and re-borrow up to $1.2 billion (subject to covenant limitations) until September 30, 2026, the maturity date. The Lenders and their respective Revolving Commitment under the Credit Agreement are as follows:
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| Lenders |
Revolving Commitment |
|||
| JPMorgan Chase Bank, N.A. |
$ | 155,000,000 | ||
| Wells Fargo Bank, National Association |
130,000,000 | |||
| U.S. Bank National Association |
130,000,000 | |||
| MUFG Bank, Ltd. |
130,000,000 | |||
| Bank of America, N.A. |
130,000,000 | |||
| PNC Bank, National Association |
105,000,000 | |||
| Truist Bank |
105,000,000 | |||
| BMO Bank, N.A. |
75,000,000 | |||
| The Toronto Dominion Bank |
75,000,000 | |||
| Banco Bilbao Vizcaya Argentaria, S.A. New York Branch |
75,000,000 | |||
| Svenska Handelsbanken AB (PUBL) New York Branch |
45,000,000 | |||
| Arvest Bank |
45,000,000 | |||
|
|
|
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| Total |
$ | 1,200,000,000 | ||
|
|
|
|||
Payment of Interest and Principal. The Company is required to periodically pay interest on any outstanding principal balance based upon the elected type of Borrowing, the elected Interest Period and the Agreed Currency, if applicable. The interest rate would generally be based upon either (i) various published rates (including the Prime Rate, the NYFRB Rate, the Adjusted Term SOFR Rate, the Adjusted EURIBOR Rate, the PESO Rate, or the Daily Simple RFR) plus various pre-defined spreads or (ii) a competitive variable or fixed rate accepted by us.
The Company is required to pay the outstanding principal amount at the maturity date. We can prepay the outstanding principal prior to maturity, except for Loans denominated in Mexican Pesos. We also must pay applicable break funding payments if we repay certain Loans prior to maturity.
Acceleration of Indebtedness. Subject to certain customary cure periods, the Credit Agreement provides that if we breach any representation or warranty, do not comply with any covenant, fail to pay principal, interest or fees in a timely manner, or if any Event of Default otherwise occurs, then the Credit Agreement may be terminated, and the Required Lenders may declare all outstanding Indebtedness under the Credit Agreement to be due and immediately payable.
Accordion Feature. The Credit Agreement contains an “accordion feature” that provides for an increase in borrowing capacity of up to $600 million, upon request of the Company subject to Lenders’ consents.
The schedules and exhibits to the Credit Agreement were not amended and are not part of Annex I to the Amendment Agreement. However, such schedules and exhibits can be found as part of the Amendment Agreement adopting the Fourth Amended and Restated Credit Agreement, filed October 1, 2021 as Exhibit 10.1 to the Company’s Form 8-K, and are incorporated by reference.
The foregoing is only a summary of the Amendment Agreement and certain terms of the Credit Agreement and is qualified in its entirety by reference to the Amendment Agreement, which is filed as Exhibit 10.1 to this Form 8-K and is incorporated herein by reference.
JPMorgan, the other listed Lenders and their affiliates have provided, from time to time, and continue to provide commercial banking and related services, as well as investment banking, financial advisory and other services to us and/or to our affiliates, for which we have paid, and intend to pay, customary fees, and, in some cases, out-of-pocket expenses.
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| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information provided in Item 1.01 above, including Exhibit 10.1 hereto, is incorporated by reference into this Item 2.03.
| Item 7.01 | Regulation FD Disclosure. |
The Company issued a press release on March 25, 2024 regarding the Amendment Agreement and the Company’s capital allocation priorities. The press release is attached as Exhibit 99.1 and is incorporated by reference into this Item 7.01.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
EXHIBIT INDEX
| * | Denotes filed herewith. |
| ** | Denotes furnished herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| LEGGETT & PLATT, INCORPORATED | ||||||
| Date: March 25, 2024 | By: | /s/ JENNIFER J. DAVIS | ||||
| Jennifer J. Davis | ||||||
| Executive Vice President – General Counsel | ||||||
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