Business Context and Reporting Period
Company: SCP Pool Corporation (POOL CORP)
Filing Type: Form 8-K (Current Report)
Report Date: December 22, 2005
Event Date: December 20, 2005
Context: The Company entered into a material definitive agreement to amend its existing senior revolving credit facility.
Key Financial Metrics and Debt Structure
The filing details a restructuring of the Company's debt facilities rather than reporting operational financial results (revenue, profit, or cash flow) for a specific period.
- Existing Facility: $120 million, five-year, unsecured, senior revolving credit facility (originally entered November 2, 2004).
- New Term Loan: $60 million added via amendment.
- Total Borrowing Capacity: Increased by $60 million through the addition of the term loan.
- Term Extension: The Credit Facility term was extended by one year.
- Interest Rates:
- Base Rate: Greater of Wachovia prime rate or Federal Funds Rate + 0.50%.
- LIBOR Option: LIBOR plus a spread of 0.625% to 0.750% (dependent on leverage ratio).
- Incremental Capacity: Option to request an additional increase of up to $40 million in revolving or term loan commitments, subject to conditions.
Material Changes Versus Prior Period
The primary material change is the amendment of the credit agreement executed on December 20, 2005. This amendment:
- Introduced a new $60 million term loan component.
- Extended the maturity of the revolving credit facility by one year.
- Established mandatory prepayment provisions for the new term loan.
- Provided an accordion feature allowing for up to $40 million in additional borrowing capacity.
Guidance, Outlook, and Management Commentary
Use of Proceeds: The Company intends to use the proceeds from the $60 million term loan for general corporate purposes.
Administrative Agents: Wachovia Bank, National Association continues as Administrative Agent, Swingline Lender, and Issuing Lender. Wachovia Capital Markets, LLC serves as the sole lead arranger and book manager.
Regulation FD: A press release regarding this amendment was issued on December 21, 2005.
Future Filing: The Second Amendment of the Credit Agreement will be filed as an exhibit to the Company's Form 10-K for the fiscal year ended December 31, 2005.
Investor Verification Checklist
- Verify the exact interest rate spread applicable based on the Company's current leverage ratio.
- Review the specific "mandatory prepayment provisions" for the term loan in the full Credit Agreement.
- Confirm the conditions required to exercise the option for an additional $40 million in borrowing capacity.
- Check the upcoming Form 10-K for the full text of the Second Amendment to the Credit Agreement.