8-KMaterial AgreementsFinancial EventsOther Events

ENTEGRIS INC 8-K Report, Material Agreement (Feb 21, 2008)

Filed February 21, 2008For Securities:ENTG

Summary

Entegris, Inc. (ENTG) announced on February 21, 2008, that on February 15, 2008, it entered into a new $230 million revolving credit facility with Wells Fargo Bank, N.A., as agent, and other banks. This new five-year facility replaces a previous credit agreement from June 2007. The new facility offers an option to expand by up to $20 million under certain conditions and provides flexible interest rate options, including Base Rate plus 0.50% or LIBOR plus a margin ranging from 1.00% to 1.50% based on leverage. Voluntary prepayments are allowed without penalty, excluding customary breakage costs for LIBOR borrowings. The new credit agreement is supported by guarantees from material domestic subsidiaries and a pledge of 65% of the stock of material foreign subsidiaries. It includes standard financial covenants related to leverage and interest coverage, as well as negative covenants restricting asset sales, business changes, mergers, acquisitions, dividends, additional debt, loans, liens, and affiliate transactions. The agreement also outlines customary representations, warranties, affirmative covenants, and events of default, which, if triggered, could lead to the acceleration of all amounts due.

Key Highlights

  • 1Entegris entered into a new 5-year, $230 million revolving credit facility on February 15, 2008.
  • 2The new facility replaces a previous $60 million revolving and $25 million term loan credit agreement from June 2007.
  • 3The facility has an uncommitted option to increase by up to $20 million.
  • 4Borrowing options include Base Rate plus 0.50% or LIBOR plus a margin of 1.00%-1.50% based on leverage.
  • 5Voluntary prepayments and commitment reductions are permitted without penalty (except for LIBOR breakage costs).
  • 6The facility is secured by guarantees from domestic subsidiaries and pledges of foreign subsidiary stock.
  • 7Key covenants include leverage and interest coverage ratios, with restrictions on asset sales, debt, dividends, and M&A activities.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report Entegris, Inc.'s entry into a new, larger, and longer-term revolving credit facility and the termination of its previous credit agreement.

The new facility is significantly larger at $230 million compared to the previous $60 million revolving credit. It also has a longer term of five years and replaces both a revolving facility and a term loan. The terms and covenants have also been updated.

The new facility requires Entegris to adhere to quarterly financial covenants, including leverage and interest coverage ratios. It also imposes negative covenants that restrict activities such as selling assets, engaging in mergers or acquisitions, paying dividends, taking on additional debt, and transacting with affiliates, subject to certain exceptions.

If an event of default occurs, such as payment defaults, breach of covenants, or bankruptcy, the lenders would have the right to take actions including accelerating all amounts due under the facility and pursuing other remedies available to unsecured creditors.