8-KMaterial AgreementsFinancial EventsExhibits & Filings

DOVER Corp 8-K Report, Material Agreement (Sep 20, 2016)

Filed September 20, 2016For Securities:DOV

Summary

Dover Corporation (DOV) has filed a Form 8-K on September 20, 2016, reporting the entry into a material definitive agreement. Specifically, on September 16, 2016, the company secured a $500 million unsecured term loan facility with a syndicate of thirteen banks. This facility is intended to finance a portion of the acquisition of Wayne Fueling Systems, Ltd., or to refinance debt incurred for the same purpose. The loan has a maturity of one year from the drawing date and includes commitments from the lenders that will terminate by December 31, 2016, or earlier upon the closing of the Wayne Fueling acquisition. Investors should note the interest rate structure, which can be based on LIBOR or an Alternate Base Rate, plus an applicable margin ranging from 0.75% to 1.00% based on the company's senior unsecured debt ratings. Additionally, a facility fee of 0.070% per annum is payable on the total commitments.

Key Highlights

  • 1Dover Corporation entered into a $500 million unsecured term loan facility on September 16, 2016.
  • 2The loan proceeds are designated to fund the acquisition of Wayne Fueling Systems, Ltd., or to refinance related indebtedness.
  • 3The term loan facility matures one year from the date of drawing.
  • 4Lender commitments will expire by December 31, 2016, unless the term loans are drawn.
  • 5Interest rates are variable, based on LIBOR or Alternate Base Rate, plus an applicable margin of 0.75% to 1.00% tied to credit ratings.
  • 6A facility fee of 0.070% per annum is charged on the total commitment amount until funding.
  • 7The agreement includes customary restrictive covenants, including limitations on liens and asset sales, and requires a minimum interest coverage ratio of 3.00:1.00.

Frequently Asked Questions

The primary purpose of the $500 million unsecured term loan facility is to provide funding for Dover Corporation's acquisition of Wayne Fueling Systems, Ltd., or to refinance any existing indebtedness incurred for this acquisition.

The term loans will mature on the one-year anniversary of their drawing. However, the lenders' commitments to provide these loans will terminate earlier, on the earlier of the loan drawing date, ten business days after the closing of the Wayne Fueling acquisition, or December 31, 2016.

The interest rate can be structured in two ways: for LIBOR borrowings, it's the LIBO rate plus a statutory reserve rate and an applicable margin (0.75% to 1.00%) based on Dover's credit rating; for ABR borrowings, it's the Alternate Base Rate plus the same applicable margin. There is also a facility fee of 0.070% per annum on the total commitments.

The Term Loan Agreement contains customary restrictive covenants, including limitations on the company's ability to grant liens on its assets, restrictions on certain consolidations, mergers, and asset sales. Additionally, Dover must maintain a minimum interest coverage ratio of EBITDA to consolidated net interest expense of at least 3.00:1.00 while amounts remain outstanding.