Item 1.01 Entry Into a Material Definitive Agreement
Amendments to the Credit
Agreement
On April 24, 2023, TechnipFMC plc (the “Company”) entered into
a fifth amendment (the “Amendment No. 5”) to its credit
agreement dated February 16, 2021 (as amended from time to
time) providing for a senior secured multicurrency revolving credit
facility (the “Existing Credit Facility” and as amended, the
“Credit Agreement”). Capitalized terms used in this Form
8-K but not defined have
the meaning provided in Amendment No. 5.
The Amendment No. 5 increases the commitments available to the
Company under the Credit Agreement to $1,250,000,000 and extends
the term of the Credit Agreement to five years from the date of the
Amendment No. 5. The Credit Agreement also provides for a
$250,000,000 letter of credit sub-facility.
Borrowings under the revolving credit facility bear interest at the
following rates, plus an applicable margin, depending on
currency:
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U.S. dollar denominated loans bear interest, at the higher of the
prime rate last quoted by The Wall
Street Journal in the U.S. as the prime rate in effect, an
adjusted rate linked to the New York Federal Reserve Bank rate from
time to time or an adjusted rate linked to the Term SOFR Rate for
one month interest period;
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Sterling denominated loans bear interest at Adjusted Daily Simple
SONIA Rate; and
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Euro denominated loans bear interest on adjusted rate linked to the
Euro interbank offered rate.
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The applicable margin for borrowings under the revolving credit
facility ranges from 2.50% to 3.50% for Euro and Sterling loans and
1.50% to 2.50% for U.S. dollar loans, depending on a total leverage
ratio. The Credit Agreement is subject to customary representations
and warranties, covenants, events of default, mandatory repayment
provisions and financial covenants.
Upon the occurrence of an Investment Grade Debt Rating by any two
of three Rating Agencies and the satisfaction of certain other
conditions precedent, the collateral securing the Credit Agreement
and the guarantees provided by certain subsidiaries of the Company
shall be automatically released and certain negative covenants will
no longer apply to the Company.
Performance Letter of
Credit Facility
On April 24, 2023, the Company entered into a new $500,000,000
five-year senior secured performance letters of credit facility
(the “Performance LC Credit Agreement”). The commitments under the
Performance LC Credit Agreement may be increased to $1,000,000,000,
subject to the satisfaction of certain customary conditions
precedent related to the increase in commitments.
The Performance LC Credit Agreement permits the Company and its
subsidiaries to have access to performance letters of credit
denominated in a variety of currencies to support the contracting
activities of the Company and its subsidiaries with counterparties
that require or request a performance guarantee or similar.
The Performance LC Credit Agreement contains substantially the same
customary representations and warranties, covenants, events of
default, mandatory repayment provisions and financial covenants as
the Credit Agreement and benefits from the same guarantees and
security as the Credit Agreement on a pari passu basis.
Upon the occurrence of an Investment Grade Debt Rating by any two
of three Rating Agencies and the satisfaction of certain other
conditions precedent, the collateral securing the Performance LC
Credit Agreement and the guarantees provided by certain
subsidiaries of the Company shall be automatically released and
certain negative covenants therein will no longer apply to the
Company.
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 hereby incorporated into
this Item 2.03 by reference.