8-KMaterial Agreements

EMCOR Group, Inc. 8-K Report, Material Agreement (Nov 26, 2013)

Filed November 26, 2013For Securities:EME

Summary

EMCOR Group, Inc. (EME) filed an 8-K on November 26, 2013, to announce the execution of a Fourth Amended and Restated Credit Agreement. This new agreement, effective November 25, 2013, significantly restructures and enhances the company's credit facilities. It provides for a revolving credit facility of up to $750,000,000, with the potential to increase by an additional $300,000,000 under certain conditions. Additionally, the agreement includes term loans totaling $350,000,000. This updated credit facility has a five-year term, maturing on November 25, 2018, and is secured by substantially all of the company's and its U.S. subsidiaries' assets. The company will be required to make quarterly principal payments on the term loans starting in March 2014. This refinancing provides EMCOR with enhanced financial flexibility and a clear debt maturity profile for the next five years.

Key Highlights

  • 1EMCOR Group entered into a Fourth Amended and Restated Credit Agreement on November 25, 2013, replacing its prior credit facility.
  • 2The new agreement provides a revolving credit facility of up to $750,000,000, with an option to increase by an additional $300,000,000.
  • 3Term loans under the new agreement aggregate $350,000,000.
  • 4The credit facility has a five-year term, maturing on November 25, 2018.
  • 5The agreement is secured by substantially all of the company's and its U.S. subsidiaries' assets.
  • 6Quarterly principal installments of $4,375,000 are required for the term loans, commencing March 31, 2014.
  • 7Borrowing interest rates are based on a choice between prime rate or federal funds rate plus a spread, or LIBOR plus a spread, with rates varying based on financial tests.

Frequently Asked Questions

The primary purpose of this 8-K filing is to disclose the entry into a new, significantly amended, and restated credit agreement. This agreement outlines the terms of the company's primary borrowing facilities, including revolving credit and term loans.

EMCOR has a revolving credit facility of up to $750,000,000 and term loans totaling $350,000,000. Additionally, there is an option to increase the revolving credit facility by up to $300,000,000 under specific conditions, potentially bringing the total available borrowing capacity higher.

The new credit agreement has a five-year term and matures on November 25, 2018. The term loans require quarterly principal installments of $4,375,000, with the first payment due on March 31, 2014.

The new credit agreement is secured by substantially all of the assets of EMCOR Group, Inc. and substantially all of the assets of its U.S. subsidiaries, as detailed in the associated Security Agreement and Pledge Agreement.