8-KMaterial Agreements

ENTEGRIS INC 8-K Report, Material Agreement (Mar 14, 2017)

Filed March 14, 2017For Securities:ENTG

Summary

Entegris, Inc. (ENTG) announced on March 14, 2017, that it entered into an amendment to its existing Credit Agreement, specifically Amendment No. 1 to the Term Credit and Guaranty Agreement dated April 30, 2014. This amendment effectively reprices its term loan, leading to a reduction in the interest rates applicable to both LIBOR and base rate borrowings. The applicable margin for LIBOR borrowings decreased from 2.75% to 2.25% (with a 0.0% LIBOR floor), and for base rate borrowings, it decreased from 1.75% to 1.25% (with a 1.00% base rate floor). This repricing signifies a potential improvement in the company's borrowing costs and reflects favorable credit market conditions for Entegris. While the company incurred certain fees and expenses in connection with this amendment, the reduction in interest rates is expected to positively impact its interest expense going forward. Investors should note the reset of the prepayment premium period, which may influence future financing decisions.

Key Highlights

  • 1Entegris entered into Amendment No. 1 to its Term Credit and Guaranty Agreement on March 14, 2017.
  • 2The amendment repriced the company's term loan, reducing interest rates.
  • 3Applicable margin for LIBOR borrowings decreased from 2.75% to 2.25% (0.0% floor).
  • 4Applicable margin for base rate borrowings decreased from 1.75% to 1.25% (1.00% floor).
  • 5The decreases in margins became effective upon the execution of the amendment.
  • 6A prepayment premium window was reset, impacting future refinancing possibilities.
  • 7The company incurred fees and expenses related to the amendment.

Frequently Asked Questions

The main impact is a reduction in Entegris's borrowing costs. The interest rates on its term loan have been lowered for both LIBOR and base rate borrowings due to a decrease in the applicable margins.

The total amount of Entegris's debt obligation did not change. However, the terms of the existing debt were amended to reduce the interest expense associated with it.

The new applicable margin for LIBOR borrowings is 2.25% (with a 0.0% LIBOR floor), down from 2.75%. The new applicable margin for base rate borrowings is 1.25% (with a 1.00% base rate floor), down from 1.75%.

A 'repricing' typically means the company has renegotiated its existing debt to secure lower interest rates. For investors, this generally signifies improved financial health and potentially higher profitability due to reduced interest expenses, assuming the principal amount of debt remains the same.