Hexcel Corporation Enters into the Second Amendment to the Credit Agreement
January 28, 2021 at 05:01 pm EST
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On January 28, 2021(the Effective Date), Hexcel Corporation entered into the Second Amendment to the credit agreement, dated as of June 20, 2019, by and among the Hexcel, as borrower, the lenders party thereto and Citizens Bank, N.A., as administrative agent, as amended by the First Amendment dated September 28, 2020. Pursuant to the Amendment, certain terms of the Credit Agreement were modified for a period beginning on the Effective Date to and including March 31, 2022 (unless earlier terminated by Hexcel in accordance with the Amended Credit Agreement, the Liquidity Covenant Period"). During the Liquidity Covenant Period, Hexcel will not be subject to a maximum leverage ratio covenant, but will instead be required to maintain Liquidity of at least $250,000,000. Additionally, during such period, Hexcel will be subject to limitations on share repurchases, cash dividends, and its ability to incur secured debt, in each case subject to certain exceptions; the applicable margin and commitment fees are increased; the incremental facility will not be available; and if Hexcel's public debt rating is downgraded to (i) BB or lower by Standard & Poor's and (ii) Ba2 or lower by Moody's, Hexcel will be required to grant liens on certain of its assets, which liens will be released upon Hexcel's public debt rating being upgraded to BB+ or higher by Standard & Poor's or Ba1 or higher by Moody's. Hexcel's current public debt rating is BBB-/Baa3. Additionally, the Amendment provides that Hexcel will not be subject to an interest coverage ratio covenant until the test period ending December 31, 2021. Finally, in connection with the Amendment, revolving commitments under the Amended Credit Agreement were reduced to $750,000,000.
Hexcel Corporation is engaged in providing advanced lightweight composites technology. The Company's product range includes carbon fiber, specialty reinforcements, prepregs and other fiber-reinforced matrix materials, honeycomb, resins, engineered core and composite structures for use in commercial aerospace, space and defense, and industrial applications. The Company operates through two segments: Composite Materials and Engineered Products. The Composite Materials segment comprises its carbon fiber, specialty reinforcements, resin systems, prepregs and other fiber-reinforced matrix materials, and honeycomb core product lines and pultruded profiles. The Engineered Products segment consists of lightweight high strength composite structures, radio frequency/electromagnetic interference (RF/EMI) and microwave absorbing materials, engineered core and specialty machined honeycomb products with added functionality and thermoplastic additive manufacturing.