01—Abstract
Summary
Summary of the 8-K filed November 4, 2024. Cited figures are marked; the original filing is the authoritative source.
On November 4, 2024, Vulcan Materials Company entered into a credit agreement with Truist Bank, as administrative agent, providing a $2.0 billiona 2-year delayed draw term loan facility.
The filing states the facility will be used, among other things, to fund the previously announced acquisition of Wake Stone Corporation. The credit agreement contains customary representations, warranties, covenants and events of default, with a primary negative covenant limiting secured debt and a financial covenant setting a maximum debt to EBITDA ratio of 3.50 to 1.00 (or 4.00 to 1.00 for four fiscal quarters ending after the consummation of certain material acquisitions). Borrowings bear interest at Adjusted Term SOFR plus a margin of 1.000%b to 1.625%, or at a base rate plus a margin of 0.000% to 0.625%, with margins based on the company's credit ratings.
On the same date, Vulcan entered into a Fifth Amendment to its September 10, 2020 revolving credit agreement with Truist Bank, as administrative agent. The amendment extends the revolver's maturity date from August 8, 2027 to November 4, 2029, with two one-year extension options. As of the filing date, the net amount available for borrowing under the revolving facility was approximately $1,504.8 millionc, reflecting $95.2 million of utilization supporting outstanding standby letters of credit.
Proceeds may be used for general corporate purposes. Taken together, the filing shows Vulcan adding a $2.0 billiond committed term loan to support a pending acquisition while lengthening the maturity of its existing revolving credit capacity. Investors would note the leverage covenant and the pricing grid tied to credit ratings as key terms governing the new borrowing.
02—Key points
Key Highlights
- Entered a $2.0 billion 2-year delayed draw term loan facility with Truist Bank as administrative agent, to fund in part the previously announced acquisition of Wake Stone Corporation.
- Term loan borrowings bear interest at Adjusted Term SOFR plus 1.000% to 1.625%, or a base rate plus 0.000% to 0.625%, with margins based on credit ratings.
- Financial covenant is a maximum debt to EBITDA ratio of 3.50 to 1.00, with a permitted 4.00 to 1.00 for four fiscal quarters ending after certain material acquisitions are consummated.
- Primary negative covenant limits secured debt.
- Fifth Amendment extends the revolving credit facility maturity from August 8, 2027 to November 4, 2029, with two one-year extension options.
- Approximately $1,504.8 million net available for borrowing under the revolving credit agreement, after $95.2 million used to support outstanding standby letters of credit.
- Lenders and their affiliates have provided and may continue to provide investment banking, commercial banking, and other services for which customary fees are paid.
03—Questions
Frequently Asked Questions
What is the purpose of the new $2.0 billion term loan?
The filing states the Term Loan Facility will be used to fund, among other things, the previously announced acquisition of Wake Stone Corporation.
How long is the new term loan facility?
The Credit Agreement provides for a 2-year delayed draw term loan facility.
What leverage limit must Vulcan maintain under the credit agreement?
The financial covenant is a maximum debt to EBITDA ratio of 3.50 to 1.00, which increases to a permitted 4.00 to 1.00 for four fiscal quarters ending after the consummation of certain material acquisitions.
What changed in the existing revolving credit facility?
The Fifth Amendment extends the maturity date from August 8, 2027 to November 4, 2029, with two one-year extension options. Proceeds may be used for general corporate purposes.
How much capacity is available under the revolving credit facility?
As of the filing date, the net amount available for borrowing was approximately $1,504.8 million, reflecting $95.2 million used to support outstanding standby letters of credit.
04—Continue