8-KMaterial AgreementsExhibits & Filings

FIRST SOLAR, INC. 8-K Report, Material Agreement (Oct 20, 2010)

Filed October 20, 2010For Securities:FSLR

Summary

First Solar, Inc. (FSLR) has filed an 8-K report on October 20, 2010, detailing the entry into a material definitive agreement: an Amended and Restated Credit Agreement. This agreement establishes a $600 million senior secured five-year revolving credit facility, which is an increase from the original credit agreement dated September 4, 2009. The facility is available for general corporate purposes and includes provisions for letters of credit and swingline loans. The enhanced credit facility provides First Solar with significant financial flexibility, allowing for potential increases in commitments up to $750 million. The terms include variable interest rates based on either a Eurocurrency rate or a base rate, plus applicable margins, with adjustments based on the company's leverage ratio. Commitment fees and letter of credit fees are also stipulated. The agreement also outlines a comprehensive set of covenants, including restrictions on indebtedness, liens, mergers, and dividends, alongside financial covenants related to leverage, EBITDA, and liquidity.

Key Highlights

  • 1First Solar entered into a $600 million Amended and Restated Credit Agreement, effective October 15, 2010.
  • 2This agreement provides a senior secured five-year revolving credit facility, available for general corporate purposes.
  • 3The facility allows for potential increases in commitments up to $750 million.
  • 4Interest rates are variable, tied to Eurocurrency or base rates with applicable margins, subject to leverage ratio adjustments.
  • 5The agreement includes a commitment fee of 0.375% per annum on unutilized commitments, also subject to leverage ratio adjustments.
  • 6The credit facility is secured by pledges of capital stock in key international subsidiaries (Singapore, Germany, France) and a security interest in intercompany receivables.
  • 7The agreement imposes various restrictive covenants on subsidiaries and the company regarding indebtedness, liens, dividends, and business operations, in addition to financial covenants on leverage, EBITDA, and liquidity.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report First Solar, Inc.'s entry into a material definitive agreement, specifically an Amended and Restated Credit Agreement that establishes a new $600 million revolving credit facility.

The new credit facility has an aggregate principal amount of $600 million and is a five-year revolving credit facility. The company also has the right to increase the aggregate commitments up to $750 million, subject to certain conditions.

The credit agreement includes financial covenants that require the company to maintain a maximum leverage ratio, generate a minimum amount of EBITDA, and preserve a minimum level of liquidity. These covenants are designed to ensure the company's financial health and its ability to service its debt.

The credit facility is secured by pledges of 66% of the capital stock of First Solar's Singapore and Germany holding companies, and 66% of its French holding company. It is also secured by a security interest in intercompany receivables. For borrowings by the Subsidiary Borrower, there are additional guarantees from the Company and certain German subsidiaries, as well as pledges of stock in German entities.