cts-8k_20211215.htm

IN	1-4639	35-0225010
(State or other jurisdiction of incorporation)	(Commission File Number)	(1.R.S. Employer Identification No)
4925 Indiana Avenue
Lisle IL		60532
(Address of principal executive offices)		(Zip Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a12)

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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240. l 4d2(b))

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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4( c))

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Common Stock, no par value		CTS		New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

On December 15, 2021, CTS Corporation (the “Company”) and its subsidiary, CTS Ceramics Denmark A/S, entered into a five-year Credit Agreement (the “Credit Agreement”) with BMO Harris Bank N.A., as L/C Issuer and Administrative Agent; BMO Capital Markets Corp., as Sole Book Runner and Joint-Lead Arranger; Bank of America, N.A., Wells Fargo Bank N.A. and U.S. Bank National Association, as Joint-Lead Arrangers; and the guarantors and lenders from time-to-time party thereto. The Credit Agreement provides for an unsecured revolving credit facility of $400 million. In addition, the Company may request, with the written consent of the Administrative Agent (and subject to certain additional conditions), that the aggregate credit extended under the Credit Agreement be increased by up to $200 million in the form of additional revolving loans or term loans.

The Company’s new unsecured credit facility replaces the prior $300 million unsecured credit facility. The prior Credit Agreement (the “Prior Credit Agreement”) by and among the Company, its subsidiary, CTS International B.V.; BMO Harris Bank N.A., as L/C Issuer and Administrative Agent; BMO Capital Markets Corp., as Sole Book Runner and Joint-Lead Arranger; Bank of America, N.A., as Joint-Lead Arranger; Wells Fargo Bank, N.A., as Joint-Lead Arranger; PNC Bank, National Association; The Northern Trust Company; and U.S. Bank National Association was due to expire on February 12, 2024. Borrowings of $50 million under the Prior Credit Agreement were refinanced under the Credit Agreement, and the Prior Credit Agreement was terminated as of December 15, 2021.

The revolving credit facility provided under the Credit Agreement includes a swing line sublimit of $20 million and a letter of credit sublimit of $20 million. Borrowings on the revolving credit facility bear interest as follows: (i) base rate loans: at a rate per annum equal to the sum of the applicable margin plus the base rate from time-to-time in effect; (ii) term SOFR loans: at a rate per annum equal to the sum of the applicable margin plus a term SOFR applicable to such interest period plus the term SOFR adjustment; (iii) RFR loans: at a rate per annum equal to the sum of the applicable margin plus the applicable daily simple RFR plus the applicable RFR adjustment; and (iv) CIBOR loans: at a rate per annum equal to the sum of the applicable margin plus adjusted CIBOR applicable to such interest period. The applicable margin varies based on the Company’s net leverage ratio. The Company pays a commitment fee quarterly on the unused portion of the revolving credit facility, which varies based on the Company’s net leverage ratio.

The Credit Agreement contains customary covenants including limitations on the ability of the Company and its subsidiaries to incur debt, make certain investments, make acquisitions, incur liens, dispose of assets, and make non-cash distributions to its shareholders. These limitations are subject to exceptions as set forth in the Credit Agreement. The Credit Agreement requires that the Company maintain a net leverage ratio of not greater than 3.5 to 1 (provided that the Company may by written notice increase the maximum net leverage ratio to 4.0 to 1 on a one-time basis for the four consecutive quarters following a permitted acquisition where the total consideration is $100 million or greater) and to maintain an interest coverage ratio of not less than 3.0 to 1. Borrowings under the Credit Agreement are guaranteed by the Company and certain of its subsidiaries.

The Credit Agreement provides for customary events of default, including failure to pay any principal or interest when due, failure to comply with covenants, false representations or cross defaults. If an event of default occurs, the lenders under the Credit Agreement will be entitled to take various actions, including the acceleration of amounts due under the Credit Agreement.

Certain of the lenders, agents and other parties to the Credit Agreement and their affiliates have in the past provided, and in the future may provide, commercial banking and other services to the Company and its subsidiaries. Those parties have received, and may in the future receive, customary compensation for such services.

The foregoing description of the Credit Agreement is qualified in its entirety by reference to the complete terms and conditions of the Credit Agreement which is filed as Exhibit 10.1 to this report and incorporated herein by reference.

Information reported under Item 1.01 of this Current Report on Form 8-K is incorporated by reference in response to this Item 1.02.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

Information reported under Item 1.01 of this Current Report on Form 8-K is incorporated by reference in response to this Item 2.03.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


Date: December 17, 2021		CTS CORPORATION

	By:	/s/ Thomas M. White
		Thomas M. White
		Corporate Controller

Exhibit		Description
10.1		Credit Agreement by and among CTS Corporation, the Lenders from time to time parties thereto, and BMO Harris Bank N.A, as L/C Issuer and Administrative Agent dated December 15, 2021.
104		Cover Page Interactive Data File (embedded within the Inline XBRL Document)