UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM
CURRENT REPORT
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Item 1.01. Entry Into a Material Definitive Agreement
On March 13, 2020, BorgWarner Inc. (the “Company”) entered into a Fourth Amended and Restated Credit Agreement (the “Credit Agreement”) with Bank of America, N.A., as administrative agent, and other lenders, under which the lenders committed to provide loans under an unsecured revolving credit facility (the “Credit Facility”) in an initial maximum principal amount of up to $1.5 billion, which shall be increased by an additional principal amount of $500 million automatically upon the closing of the acquisition of all or substantially all of the equity interests of Delphi Technologies PLC (“Delphi Technologies”) by the Company or one of its subsidiaries (the “Acquisition”). The Credit Agreement amends and restates in its entirety the Third Amended and Restated Credit Agreement, dated as of June 29, 2017, among the Company and Bank of America, N.A., as administrative agent, and other lenders identified therein (the “Existing Credit Agreement”)
The commitments of the lenders under the Credit Facility mature on March 13, 2025, unless extended by the lenders, at their option upon request by the Company. Interest under the Credit Facility accrues at varying rates based upon (i) the type of borrowing under the Credit Facility and (ii) the rating by certain specified rating agencies of the Company’s outstanding senior, unsecured, long-term indebtedness as of the applicable date of borrowing.
The Credit Agreement includes a financial covenant that requires the Company to maintain a consolidated leverage ratio (i.e., as at the last day of any period of four consecutive fiscal quarters of the Company, the ratio of consolidated total debt on such day to consolidated EBITDA for such period) of not more than 3.50 to 1.00. Upon the closing of certain acquisitions, the Company, at its option, may temporarily increase the consolidated leverage ratio to 3.75 to 1.00.
The Credit Agreement contains customary events of default, including payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to similar obligations, customary ERISA defaults, certain events of bankruptcy and insolvency, judgment defaults or a change in control of the Company. The Credit Agreement also contains a provision permitting the lenders to accelerate the repayment of all loans outstanding under the Credit Facility during an event of default.
None of the Company or any of its affiliates has a material relationship with any lender in the Credit Facility other than in respect of the Credit Facility and other customary banking relationships.
Any proceeds from the Credit Facility will be used by the Company for general corporate purposes. No new borrowings were made at the closing of the Credit Agreement and no loans were outstanding under the Existing Credit Agreement at closing.
The descriptions of the Credit Agreement are qualified in their entirety by reference to the full text of the Credit Agreement, the form of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information under Item 1.01 of this report is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure
On March 11, 2020, Delphi Technologies filed a Preliminary Proxy Statement on Form PRE 14A with the Securities and Exchange Commission, which contains additional information regarding the Acquisition. The Company is not responsible for the contents of such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are being furnished as part of this Report.
EXHIBIT INDEX
| Exhibit | ||
| Number | Description | |
| 10.1 | Fourth Amended and Restated Credit Agreement dated as of March 13, 2020, among BorgWarner Inc., Bank of America, N.A., as Administrative Agent for the Lenders and as Swingline Lender, and the Lenders party thereto from time to time | |
| 104.1 | The cover page from this Current Report on Form 8-K, formatted as Inline XBRL | |
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.
| BorgWarner Inc. | ||
| Date: March 16, 2020 | By: | /s/ Tonit M. Calaway |
| Name: Tonit M. Calaway | ||
| Title: Executive Vice President and Secretary | ||