Item 1.01. Entry into a Material Definitive Agreement.
Financing Transactions
On December 15, 2020, Albemarle Corporation (the “Company”) and Albemarle Finance Company B.V. (“AFC”), Albemarle New Holding GmbH (“ANH”), and Albemarle Wodgina Pty Ltd (“Wodgina”), entered into an amendment and restatement agreement (the “A&R Agreement”) to that certain Syndicated Facility Agreement, dated as of August 14, 2019 (the “Existing Credit Facility”), among the Company, AFC, ANH, Wodgina, the several banks and other financial institutions as may from time to time become parties thereto (collectively, the “Lenders”), JPMorgan Chase Bank N.A., as Administrative Agent, and JPMorgan Chase Bank, N.A. and BofA Securities, Inc., as joint lead arrangers.
The primary purposes of the A&R Agreement were to (a) extend the final maturity date of the existing loans that were made to ANH under the Existing Credit Facility (the “Existing Loans”) from April 19, 2021 to April 19, 2023, (b) change the applicable margin for the Existing Loans as set forth below, (c) provide for an additional term loan commitment by the Lenders to the Company (the “New Incremental Commitment”) and (d) remove AFC and Wodgina as borrowers under the Existing Credit Facility.
The New Incremental Commitment permits up to two borrowings by the Company in an aggregate amount equal to $500,000,000, denominated in U.S. dollars or Euros, for general corporate purposes. The Lenders’ commitment to provide loans under the New Incremental Commitment terminates on December 10, 2021, with each such loan maturing one year after the funding of such loan. The Company can request that the maturity date of loans under the New Incremental Commitment be extended for an additional period of up to four additional years, but any such extension is subject to the approval of the Lenders.
The Existing Loans and borrowings under the New Incremental Commitment bear interest at variable rates based on an average London inter-bank Offered Rate (“LIBOR”) for deposits in the relevant currency plus an applicable margin which ranges from 1.125% to 1.750%, depending on the Company’s credit rating from Standard & Poor’s Financial Services LLC, Moody’s Investor Services, Inc., and Fitch Ratings, Inc. As of the closing of the A&R Agreement, the applicable margin over LIBOR was 1.500%.
Loans under the New Incremental Commitment must be prepaid by an amount equal to the aggregate net cash proceeds received by the Company or any of its subsidiaries in respect of any sale or other disposition of the Fine Chemistry Services line of business of the Company and its subsidiaries.
This description of the A&R Agreement is not complete and is qualified in its entirety by reference to the entire A&R Agreement, a copy of which will be filed with the Company’s Annual Report on Form 10-K for the period ending December 31, 2020.