Business Context and Reporting Period
Company: Cooper-Standard Holdings Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: April 10, 2013
Event Date: April 8, 2013
Context: The Company entered into a material definitive agreement to amend and restate its senior secured asset-based revolving credit facility.
Key Financial Metrics and Facility Terms
This filing details the terms of a new credit facility rather than reporting operational financial results (revenue, profit, or cash flow) for a specific period.
- Facility Type: Amended and Restated Senior ABL Facility (Asset-Based Lending).
- Total Revolving Availability: $150 million (subject to borrowing base).
- Sub-Facilities: Includes a $50 million letter of credit sub-facility and a $25 million swing line sub-facility.
- Incremental Capacity: Uncommitted $75 million incremental loan facility available upon lender agreement, for a potential total of $225 million.
- Maturity Date: March 1, 2018.
- Interest Rates: LIBOR or Base Rate plus an applicable margin. Initial margin is 1.5% for LIBOR/BA rate borrowings and 0.50% for Base/Prime rate borrowings.
- Fees: Commitment fee of 0.25% (if usage >50%) or 0.375% (if usage ≤50%) on unutilized commitments.
- Borrowing Base: Limited to the lesser of the maximum facility amount or a formula based on 85% of eligible accounts receivable and up to 70% of eligible inventory (or 85% of appraised net orderly liquidation value).
Material Changes Versus Prior Period
The Company amended and restated its existing $125 million senior secured asset-based revolving credit facility, dated May 27, 2010.
- Capacity Increase: The aggregate revolving loan availability increased from $125 million to $150 million.
- Structure: The new agreement introduces specific sub-facilities for letters of credit and swing lines, and adds an uncommitted incremental option not explicitly detailed in the prior facility summary.
- Utilization: No borrowings were made under the new facility on the Closing Date (April 8, 2013).
Guidance, Outlook, Risks, and Contingencies
Use of Proceeds: Proceeds may be used for issuing commercial and standby letters of credit, financing ongoing working capital needs, and general corporate purposes.
Covenants and Restrictions: The facility imposes affirmative and negative covenants restricting the Company's ability to incur debt, make investments, sell assets, pay dividends, or make acquisitions.
Financial Covenants: The Company must maintain a monthly fixed charge coverage ratio of no less than 1.0 to 1.0 when availability under the facility falls below specified levels.
Security: Obligations are guaranteed on a senior secured basis by the Company and its U.S. and Canadian subsidiaries. Collateral includes a first priority lien on accounts receivable, inventory, and other personal property. No liens were granted on assets of the European Borrower or other non-U.S. subsidiaries (excluding Canadian entities).
Investor Verification Checklist
- Verify the current utilization rate of the $150 million facility to assess immediate liquidity needs.
- Review the "borrowing base" calculations in subsequent filings to determine actual available liquidity versus the theoretical $150 million cap.
- Monitor compliance with the fixed charge coverage ratio covenant, particularly if facility availability drops below specified thresholds.
- Confirm whether the uncommitted $75 million incremental facility is exercised in future periods.
- Examine the specific "specified levels" for availability that trigger the fixed charge coverage ratio requirement.