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 No. 2 to Fourth Amended and Restated Credit Agreement
On January 15, 2021, Polaris Inc. (the “Company”) entered into an amendment (the “Second Amendment to Credit Agreement”) to its existing credit facility with U.S. Bank National Association, as administrative agent, and the several lenders party thereto dated as of July 2, 2018 (as amended, the “Existing Credit Agreement;” the Existing Credit Agreement as amended by the Second Amendment to Credit Agreement, the “Credit Agreement”). The Second Amendment to Credit Agreement amends the Existing Credit Agreement to, among other things:
(i) reflect that the 2020 Incremental Term Loans were repaid in their entirety on or prior to January 15, 2021;
(ii) revert the financial covenants to those in place previous to the covenant relief amendment, and as a result, the interest coverage ratio cannot be less than 3.00 to 1.00 and the leverage ratio cannot be greater than 3.50 to 1.00 (with certain exceptions for the four quarter period immediately following a material acquisition when the leverage ratio cannot be greater than 4.00 to 1.00);
(iii) remove mandatory prepayments related to certain debt issuances and asset sales that applied while the 2020 Incremental Term Loans were outstanding; and
(iv) make certain other modifications to negative covenants related to restricted payments, including removing restrictions on dividends, stock repurchases and the incurrence of priority indebtedness that applied during the covenant relief period and while the 2020 Incremental Term Loans were in place.
Depending on the Company’s leverage ratio, the applicable margins on the loans were reduced consistent with the reductions anticipated to be in effect after the covenant relief period ended such that applicable margins for (i) revolving advances will range from 0.00% to 0.50% for base rate advances and from 0.90% to 1.50% for eurocurrency advances and (ii) initial term loans will range from 0.00% to 0.75% for base rate advances and from 1.00% to 1.75% for eurocurrency advances.
The Credit Agreement continues to be subject to various other covenants, including, among other things, mergers and consolidations and asset sales and is subject to acceleration upon various events of default.
A copy of the Second Amendment to Credit Agreement is filed as Exhibit 10.01 hereto, qualifies the above description and is incorporated by reference herein.
Fifth Amendment to Master Note Purchase Agreement
On January 15, 2021, the Company entered into an amendment (the “Fifth Amendment”) to its existing master note purchase agreement with the purchasers party thereto dated December 13, 2010, as amended and supplemented (the “Existing 2010 Note Purchase Agreement;” the Existing 2010 Note Purchase Agreement as amended by the Fifth Amendment, the “2010 Note Purchase Agreement”). The Fifth Amendment amends the Existing 2010 Note Purchase Agreement to, among other things:
(i) revert the financial covenants to those in place previous to the covenant relief amendment, and as a result, the interest coverage ratio cannot be less than 3.00 to 1.00 and the leverage ratio cannot be greater than 3.50 to 1.00 (with certain exceptions for the four quarter period immediately following a material acquisition when the leverage ratio cannot be greater than 4.00 to 1.00);
(ii) remove mandatory prepayments related to certain debt issuances and asset sales that applied during the covenant relief period and while the 2020 Incremental Term Loans were outstanding; and
(iii) make certain other modifications to negative covenants related to restricted payments, including removing restrictions on dividends, stock repurchases and the incurrence of priority indebtedness that applied during the covenant relief period.
The 2010 Note Purchase Agreement continues to include various other covenants, including covenants that restrict the Company’s ability to, among other things, transfer or sell assets or engage in mergers or consolidations and is subject to acceleration upon various events of default.
A copy of the Fifth Amendment is filed as Exhibit 10.02 hereto, qualifies the above description and is incorporated by reference herein.
Second Amendment to Master Note Purchase Agreement
On January 15, 2021, the Company entered into an amendment (the “Second Amendment to Note Purchase Agreement”) to its existing master note purchase agreement with the purchasers party thereto dated July 2, 2018 (the “Existing 2018 Note Purchase Agreement;” the Existing 2018 Note Purchase Agreement as amended by the Second Amendment to Note Purchase Agreement, the “2018 Note Purchase Agreement”). The Second Amendment to Note Purchase Agreement amends the Existing 2018 Note Purchase Agreement to, among other things:
(i) revert the financial covenants to those in place previous to the covenant relief amendment, and as a result, the interest coverage ratio cannot be less than 3.00 to 1.00 and the leverage ratio cannot be greater than 3.50 to 1.00 (with certain exceptions for the four quarter period immediately following a material acquisition when the leverage ratio cannot be greater than 4.00 to 1.00);
(ii) remove mandatory prepayments related to certain debt issuances and asset sales that applied during the covenant relief period and while the 2020 Incremental Term Loans were outstanding; and
(iii) make certain other modifications to negative covenants related to restricted payments, including removing restrictions on dividends, stock repurchases and the incurrence of priority indebtedness that applied during the covenant relief period.
The 2018 Note Purchase Agreement continues to include various other covenants, including covenants that restrict the Company’s ability to, among other things, transfer or sell assets or engage in mergers or consolidations and is subject to acceleration upon various events of default.
A copy of the Second Amendment to Note Purchase Agreement is filed as Exhibit 10.03 hereto, qualifies the above description and is incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
SIGNATURE
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 thereunto duly authorized.
Date: January 19, 2021
| POLARIS INC. | |
| (Registrant) | |
| /s/ Lucy Clark Dougherty | |
| Lucy Clark Dougherty | |
| Senior Vice President – General Counsel, Secretary and Chief Compliance Officer |