8-KMaterial AgreementsFinancial EventsExhibits & Filings

EMCOR Group, Inc. 8-K Report, Agreement Terminated (Mar 3, 2020)

Filed March 3, 2020For Securities:EME

Summary

EMCOR Group, Inc. (EME) announced on March 3, 2020, the execution of a Sixth Amended and Restated Credit Agreement, effective March 2, 2020. This new agreement replaces the previous credit facility and significantly increases the company's borrowing capacity. It provides for a revolving credit facility of up to $1.3 billion and a term loan of $300 million, with the potential to increase the revolving credit by an additional $600 million under certain conditions. This refinancing strengthens EMCOR's financial flexibility and supports its ongoing operational needs and strategic initiatives. The Credit Agreement has a five-year term, maturing on March 2, 2025, and is secured by substantially all of the Company's and its U.S. subsidiaries' assets. The facility includes financial covenants and provides for annual principal payments on the term loan starting December 31, 2020. Interest rates are variable, based on the Company's leverage ratio and either Adjusted LIBOR or a Base Rate, with margins indicating competitive borrowing costs.

Key Highlights

  • 1EMCOR Group entered into a new Sixth Amended and Restated Credit Agreement, effective March 2, 2020, replacing its prior agreement.
  • 2The new agreement provides a revolving credit facility of up to $1.3 billion and a $300 million term loan.
  • 3Potential to increase the revolving credit facility by an additional $600 million.
  • 4The credit facility has a five-year term, maturing on March 2, 2025.
  • 5The agreement is secured by substantially all of the Company's and its U.S. subsidiaries' assets.
  • 6Includes financial covenants, representations, warranties, and events of default.
  • 7Interest rates are variable, tied to the Company's leverage ratio and based on Adjusted LIBOR or a Base Rate, with margins ranging from 0.00% to 1.75%.

Frequently Asked Questions

The new credit agreement provides for a revolving credit facility of up to $1.3 billion and a term loan of $300 million. Additionally, there is an option to increase the revolving credit facility by up to $600 million.

The Credit Agreement has a five-year term and all outstanding borrowings are due upon its expiration on March 2, 2025.

The 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 accompanying Security Agreement and Pledge Agreement.

Borrowings will bear interest at the Company's option, based on its leverage ratio. Interest rates for Adjusted LIBOR-based borrowings range from 1.00% to 1.75% above Adjusted LIBOR. For Base Rate borrowings, interest rates range from 0.00% to 0.75% above the Base Rate.