8-KMaterial AgreementsFinancial EventsExhibits & Filings

BROWN & BROWN, INC. 8-K Report, Material Agreement (Jun 18, 2008)

Filed June 18, 2008For Securities:BRO

Summary

Brown & Brown, Inc. (BRO) has entered into an Amended and Restated Revolving Loan Agreement with SunTrust Bank, significantly enhancing its financial flexibility. The new agreement, dated June 3, 2008, increases the total lending commitment to $50.0 million, with an option to expand up to $100.0 million, and extends the maturity date to June 3, 2013. This move replaces a previously reduced credit facility and provides a stronger capital base for the company's operations and potential growth initiatives. The revised loan agreement offers more favorable terms compared to the previous facility, which had been reduced to $20.0 million. The structure allows for interest rates tied to the LIBOR Rate or a base rate, along with various fees. Importantly, as of the filing date, no funds have been drawn under this new agreement, indicating it serves as a proactive measure for liquidity and future needs.

Key Highlights

  • 1Brown & Brown, Inc. entered into an Amended and Restated Revolving Loan Agreement with SunTrust Bank on June 12, 2008.
  • 2The new agreement increases the total lending commitment to $50.0 million, with an option for future expansion up to $100.0 million.
  • 3The maturity date of the revolving credit facility has been extended to June 3, 2013.
  • 4This new agreement supersedes a previous facility that had been reduced to $20.0 million.
  • 5Interest rates are based on the LIBOR Rate or a base rate, with margins dependent on the Company's funded debt to EBITDA ratio.
  • 6The agreement includes customary covenants, limitations, and events of default.
  • 7No draws have been made under the new loan agreement as of the filing date.

Frequently Asked Questions

The primary purpose of the Amended and Restated Revolving Loan Agreement is to provide Brown & Brown, Inc. with increased financial flexibility by securing a larger credit facility ($50 million, expandable to $100 million) with an extended maturity date (June 3, 2013).

The new agreement substantially increases the available credit from $20.0 million (the reduced amount of the previous facility) to $50.0 million and extends the maturity by nearly two years. It also establishes a framework for potential future increases up to $100.0 million.

As of the filing date of this 8-K report, no funds had been drawn or were outstanding under the new Loan Agreement. This suggests it is in place for potential future use rather than immediate funding needs.

The loan offers revolving credit with interest rates based on the LIBOR Rate or a base rate, with margins varying between 0.50% to 1.00% above LIBOR. It also involves upfront fees, an availability fee (0.10% to 0.20%), and a letter of credit usage fee (0.50% to 1.00%), with initial rates set until the end of the June 2008 quarter.