UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
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| Item 1.01 | Entry into a Material Definitive Agreement |
On January 11, 2023, Service Corporation International (the “Company”) entered into a new senior unsecured credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and certain other financial institutions, as lenders, providing for a $675 million senior term loan facility, maturing in January 2028 (the “Term Loan A”), and a revolving credit facility providing for borrowings of up to $1.5 billion, with commitments expiring and loans maturing in January 2028 (the “Revolving Facility” and, together with the Term Loan A, the “Credit Agreement”).
All of the indebtedness outstanding under the Credit Agreement is guaranteed by the Company’s current and future domestic subsidiaries (other than certain excluded subsidiaries).
The loans under the Credit Agreement will bear interest per annum, at the Company’s election, equal to:
| · | an alternate base rate plus the applicable margin for such loans. The alternate base rate is the greatest of (a) the Federal Funds Effective Rate plus 1/2 of 1%, (b) the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the US and (c) the adjusted Term SOFR rate for a one-month interest period beginning on such day plus 1.00%; or |
| · | the Term SOFR rate for the selected interest period plus the applicable margin for such loans. |
The applicable margin ranges from 2.25% to 1.50% for borrowings based on the Term SOFR rate and 1.25% to 0.50% for borrowings based on the alternate base rate depending on the Company’s leverage ratio.
Customary fees are payable in respect of the Credit Agreement, including letter of credit fees and commitment fees.
The Credit Agreement includes a number of negative covenants that, among other things, limit or restrict the ability of the Company and its other subsidiaries (including the guarantors) to, subject to certain exceptions, incur additional indebtedness (including guarantees), grant liens, make investments, make dividends or distributions with respect to the Company’s capital stock, make prepayments on other indebtedness, engage in mergers or change the nature of the business of the Company or its other subsidiaries (including the guarantors). In addition, the Company is required to comply with a leverage ratio of 5.00 to 1.00 (with a step up to 5.50 to 1.00 for the three consecutive fiscal quarters ended immediately following the consummation of a qualified acquisition).
The Credit Agreement also contains certain affirmative covenants, including financial and other reporting requirements, applicable to the Company and its other subsidiaries (including the guarantors).
A copy of the Credit Agreement is attached as Exhibit 10.1 and is incorporated herein by reference.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant |
The information provided in Item 1.01 of this Form 8-K is hereby incorporated by reference into this Item 2.03.
| Item 8.01 | Other Information |
On January 11, 2023, the Company issued a press release announcing the entering into of the Credit Agreement.
The press release relating to the Credit Agreement is attached as Exhibit 99.1 and is incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits |
(d) The following exhibits are included with this report:
| Exhibit No. |
Description | |
| 10.1 | Credit Agreement, dated January 11, 2023, between Service Corporation International, JPMorgan Chase Bank, N.A., as administrative agent, and certain other financial institutions, as lenders party thereto | |
| 99.1 | Press Release dated January 11, 2023 | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL) |
Signature
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.
| January 12, 2023 | By: | /s/ Eric D. Tanzberger |
| Eric D. Tanzberger | ||
| Senior Vice President | ||
| Chief Financial Officer |