Business Context and Reporting Period
Company: Atmus Filtration Technologies Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: January 7, 2026
Event: Entry into a Material Definitive Agreement (Amended and Restated Credit Agreement) and closing of the acquisition of Koch Filter Corporation.
Key Financial Metrics and Debt Structure
This filing details a refinancing and expansion of the company's credit facilities to support the Koch Filter acquisition. Specific revenue, profit, or cash flow figures are not provided in this document.
- New Term Loan Facility: $1.0 billion (fully drawn on Closing Date).
- New Revolving Credit Facility: $500 million.
- Previous Facilities: $600 million term loan (approx. $570 million outstanding) and $400 million revolver.
- Maturity Date: January 7, 2031 for both facilities.
- Sublimits (Revolver): $50 million for letters of credit; $200 million for foreign currency loans/letters of credit; $50 million swingline.
- Incremental Capacity: Borrowers may request increases up to the greater of $350 million or 100% of EBITDA, subject to a Secured Net Leverage Ratio cap of 3.00 to 1.00.
- Interest Rates (USD):
- Alternate Base Rate + 0.125% to 0.750%.
- Daily/Term SOFR + 1.125% to 1.750%.
- Commitment Fee (Unused Revolver): 0.175% to 0.25% per annum.
Material Changes Versus Prior Period
- Debt Expansion: Term loan capacity increased from $600 million to $1.0 billion; revolver capacity increased from $400 million to $500 million.
- Refinancing: The new term loan refinances the outstanding balance of the previous term loan facility.
- Acquisition Funding: Proceeds are used to finance the acquisition of Koch Filter Corporation and associated fees.
- Amortization Schedule: New term loan amortizes at 2.50% annually starting in the fifth fiscal quarter, increasing to 5.00% annually in the ninth fiscal quarter.
- Covenant Adjustments: Financial covenants are now set at a Total Leverage Ratio not to exceed 4.00 to 1.00 (adjustable to 4.50 to 1.00 for qualified acquisitions) and an Interest Coverage Ratio of at least 3.00 to 1.00.
Outlook, Risks, and Management Commentary
- Use of Proceeds: Funds from the term loan refinance existing debt and fund the Koch Filter acquisition. Revolver funds are for working capital and general corporate purposes.
- Investment Grade Trigger: Upon achieving an investment grade rating (BBB-/Baa3 or better) from at least two major agencies, the company may request unsecured incremental loans and will automatically release guarantees and security.
- Mandatory Prepayments: Required for 100% of net cash proceeds from debt issuances (not otherwise permitted) and certain asset sales.
- Risks: Compliance with financial covenants (Leverage and Interest Coverage) is required quarterly. Failure to meet these could result in an event of default.
Key Facts for Investor Verification
- Verify the total consideration paid for the Koch Filter Corporation acquisition and the specific portion funded by the new $1.0 billion term loan.
- Confirm the company's current Total Net Leverage Ratio to assess the applicable interest rate margin and commitment fee.
- Monitor the company's progress toward achieving an "Investment Grade Period" to unlock unsecured borrowing capacity and release collateral.
- Review the detailed terms of the "qualified acquisitions" that allow the leverage ratio covenant to be temporarily adjusted to 4.50 to 1.00.
- Check subsequent filings for the actual EBITDA figures used to calculate potential incremental borrowing capacity.