Business Context and Reporting Period
Company: Cooper-Standard Holdings Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: May 29, 2020
Event: Entry into a Material Definitive Agreement and creation of a direct financial obligation.
Key Financial Metrics and Debt Structure
This filing details a specific debt issuance rather than periodic financial performance metrics (revenue, profit, cash flow). The filing text does not provide values for revenue, profit, margins, or liquidity ratios.
- Instrument Issued: 13.000% Senior Secured Notes due 2024.
- Principal Amount: $250,000,000.
- Issuer: Cooper-Standard Automotive Inc. (wholly-owned subsidiary).
- Interest Payment: Semi-annually in arrears on June 1 and December 1, commencing December 1, 2020.
- Maturity Date: June 1, 2024.
- Guarantors: CS Intermediate HoldCo 1 LLC, subsidiaries guaranteeing the Term Loan Facility, and Cooper-Standard Latin America B.V. (Dutch Guarantor).
Material Changes and Debt Covenants
The primary material change is the addition of $250 million in senior secured debt. The Indenture imposes significant covenants limiting the Issuer and restricted subsidiaries regarding:
- Incurring or guaranteeing additional indebtedness or issuing preferred stock.
- Incurring liens on assets.
- Paying dividends, making distributions, or repurchasing capital stock.
- Prepaying, redeeming, or repurchasing certain debt.
- Making loans, investments, or entering into affiliate transactions.
- Selling assets or merging/consolidating with other companies.
Security Structure: The Notes are secured on a first-priority basis (pari passu with the Term Loan Facility) by liens on substantially all assets, and on a second-priority basis by liens on ABL Facility Priority Collateral (accounts receivable, inventory, etc.).
Redemption, Change of Control, and Risks
- Redemption Prior to June 1, 2022: Permitted at 100% of principal plus accrued interest and a "Make-Whole Premium." Up to 35% may be redeemed using net cash proceeds from equity offerings at a specific redemption price.
- Redemption On or After June 1, 2022: Permitted at redemption prices set forth in the Indenture.
- Change of Control: Triggers a mandatory offer to repurchase all Notes at 101% of principal plus accrued interest.
- Events of Default: If triggered, all principal, premium, and interest become immediately due and payable.
Investor Verification Checklist
- Verify the specific "Make-Whole Premium" calculation formula in the attached Indenture (Exhibit 4.1).
- Confirm the impact of the new 13.000% interest rate on the company's overall interest coverage ratio.
- Review the specific limitations on dividends and restricted payments to assess future capital return capabilities.
- Assess the priority of this new debt relative to the existing Term Loan Facility and ABL Facility.
- Monitor compliance with the new covenants regarding additional indebtedness and asset sales.