Business Context and Reporting Period
Quaker Chemical Corporation (KWR) filed a Form 8-K on April 10, 2026, reporting the entry into a Material Definitive Agreement. The filing details the execution of Amendment No. 4 to the Company's existing credit agreement, establishing a new senior secured credit facility structure.
Key Financial Metrics and Debt Structure
The Amended Credit Agreement establishes the following new facilities:
- New Euro Term Facility: € equivalent to $250,000,000 for Quaker Houghton B.V.
- New U.S. Term Facility: $550,000,000 for the Company.
- New Revolving Credit Facility: $800,000,000 for the Company and designated subsidiaries.
- Total New Facility Capacity: $1,600,000,000 (plus Euro equivalent).
Interest Rates: U.S. dollar borrowings bear interest at Base Rate or Term SOFR plus an Applicable Rate ranging from 1.000% to 1.750% (Term SOFR) or 0.000% to 0.750% (Base Rate), based on the Consolidated Net Leverage Ratio. Non-U.S. dollar borrowings bear interest at the Alternative Currency Term Rate plus 1.000% to 1.750%.
Maturity: April 10, 2031.
Collateral: Secured by first priority liens on substantially all assets of the Company and subsidiary guarantors.
Material Changes Versus Prior Period
The new agreement replaces the Existing Credit Agreement (originally dated August 1, 2019). Proceeds from the new facilities are used to:
- Repay in full all outstanding loans under the Existing Credit Agreement.
- Terminate revolving credit commitments under the Existing Credit Agreement.
- Fund additional working capital and other liquidity needs.
The filing does not provide specific financial performance metrics (revenue, profit, cash flow) for the current or prior periods, as this is a transactional filing rather than a periodic financial report.
Guidance, Covenants, and Risks
Financial Covenants:
- Consolidated Net Leverage Ratio: Generally capped at 4.25 to 1.00, with a permitted increase during a four-quarter period following certain acquisitions.
- Consolidated Interest Coverage Ratio: Required test (specific threshold not detailed in summary).
Restricted Payments (Dividends and Repurchases):
- Regular Dividends: Permitted up to the greater of $30,000,000 annually or 5% of Market Capitalization.
- Other Dividends/Repurchases: Permitted up to the greater of $33,000,000 annually or 10% of Consolidated EBITDA (if no Default).
- Aggregate Cap: Generally capped at the greater of $100,000,000 or 30% of Consolidated EBITDA, unless the Consolidated Net Leverage Ratio is below 3.00 to 1.00.
Expansion Rights: The Company may increase the facility by up to $331,000,000 or 100% of Consolidated EBITDA, plus unlimited amounts subject to pro forma leverage ratios (3.50x for first lien, 4.00x for secured junior lien).
Risks: Events of default include non-payment, breach of covenants, insolvency, and change of control. An event of default could result in immediate acceleration of all debt.
Investor Verification Checklist
- Verify the exact Euro-to-USD exchange rate used to calculate the $250,000,000 equivalent for the New Euro Term Facility.
- Review the full text of Exhibit 10.1 (Amendment No. 4) for specific definitions of "Consolidated EBITDA" and "Market Capitalization" used in covenant calculations.
- Confirm the current Consolidated Net Leverage Ratio to assess headroom for future restricted payments or facility expansion.
- Check for any subsequent press releases or filings regarding the actual drawdown amounts under the new $800,000,000 revolving facility.