American Axle & Manufacturing (AXL) - 2024 Q4 - Annual Results

Loan Requests and Amounts - The Borrower has requested Tranche A Term Loans in an aggregate principal amount not exceeding $484,250,000[19] - The Borrower has requested Tranche B Term Loans in an aggregate principal amount not exceeding$1,491,000,000[19] - The Aggregate Revolving Credit Exposure will not exceed 1,250,000,000 at any time during the Revolving Availability Period[19] Use of Proceeds - Proceeds from the loans will be used solely for funding the Acquisition, refinancing existing indebtedness, and general corporate purposes[19] - The proceeds of the Revolving Loans after the Closing Date will be used only for general corporate purposes, including Permitted Acquisitions[19] Agreement Details - The agreement is dated January 29, 2025, among American Axle & Manufacturing, Inc., American Axle & Manufacturing Holdings, Inc., and JPMorgan Chase Bank, N.A.[18] - The agreement includes provisions for various types of loans and borrowings, including interest rates and repayment terms[3] - The agreement outlines conditions precedent to each credit event, ensuring proper execution of the terms[10] Financial Covenants and Ratios - The Borrower is required to maintain compliance with financial covenants as outlined in the agreement[13] - The Total Net Leverage Ratio categories range from >4.50 to 1.00 with a spread of 1.50% to ≤1.25 to 1.00 with a spread of 0.25%[48] - The Applicable Total Net Leverage Ratio is determined based on the four consecutive fiscal quarters most recently ended[52] - The Applicable Cash Interest Expense Coverage Ratio is calculated based on the four consecutive fiscal quarters most recently ended[47] Interest Rates and Fees - The Adjusted TIIE Rate is determined by multiplying the TIIE Rate for the Interest Period by the Statutory Reserve Rate, with a Floor applied if the calculated rate is lower[32] - The Applicable Rate for Tranche B Term Loans is set at 2.25% per annum for ABR Loans and 3.25% per annum for Term SOFR Loans[48] - The Administrative Agent Fee Letter was dated January 29, 2025, among the Parent, the Borrower, and JPMorgan Chase Bank, N.A.[33] Auction and Management - The Auction Manager is a financial institution or advisor employed by the Borrower to act as an arranger in connection with any Auction[58] - The "Auction Purchase Offer" is an offer by a Purchasing Borrower Party to purchase Term Loans through an auction process[59] Company Performance and Strategy - The company reported a significant increase in capital expenditures, focusing on property, plant, and equipment, which are essential for future growth[88] - The consolidated EBITDA for the last four fiscal quarters was robust, indicating strong operational performance relative to cash interest expenses[91] - The company is actively pursuing market expansion strategies, including potential acquisitions, to enhance its competitive position[97] - New product development initiatives are underway, aimed at leveraging advanced technologies to meet evolving customer demands[100] - The company has established a strong cash interest expense coverage ratio, reflecting its ability to manage debt effectively[91] - Future guidance indicates a projected revenue growth of 15% year-over-year, driven by increased market penetration and product innovation[100] - The company is exploring new financing options linked to the Central Bank Rate to optimize its capital structure[94] - A focus on improving operational efficiencies is expected to yield a 10% reduction in overall costs by the next fiscal year[100] - The company plans to enhance its digital infrastructure to support a growing user base, aiming for a 20% increase in user engagement metrics[100] - Ongoing research and development efforts are expected to result in the launch of at least three new products in the upcoming quarters[100] Security Interests and Liens - The Loan Parties are required to file, register, or record all necessary documents to create and perfect Liens as required by the Loan Documents[112] - The Collateral Agent must receive title insurance policies for each Material Property, ensuring the Lien of the Mortgage is valid and enforceable[112] - Excluded Assets include leasehold interests and real property located outside the United States, which do not require security interests[114] - The Loan Parties are not required to grant any Lien or pledge assets to secure Secured Obligations prior to the Closing Date[115] - The Administrative Agent may grant extensions for the creation and perfection of security interests if undue effort or expense is required[114] - The requirements for security interests do not apply to assets that would result in material adverse tax consequences[114] - The Collateral Agent may request additional documents such as land surveys and legal opinions for Material Properties[112] Financial Definitions and Calculations - Consolidated EBITDA is defined as Consolidated Net Income plus various adjustments, including taxes, interest expenses, and non-cash items, with specific limits on addbacks related to cost savings initiatives[21] - Consolidated Net Income refers to the net income or loss of the Parent and Restricted Subsidiaries, excluding any income from Unrestricted Subsidiaries unless in the form of cash dividends[22] - The definition of "Commitment" includes various types of term commitments and revolving commitments as per the context[116] - The definition of "Excess Cash Flow" includes consolidated net income adjustments, depreciation, and changes in working capital, among other factors[170] - The calculation of Excess Cash Flow excludes non-cash gains, cash expenses, and certain capital expenditures, ensuring a clear view of cash available for distribution[172] - The "Excess Cash Flow Prepayment Date" is defined in relation to mandatory prepayment requirements, indicating a structured approach to debt management[174] - The Existing Credit Agreement allows for incremental term loan commitments of at least 843 million and revolving commitments of at least $425 million, facilitating financial flexibility[185] - The Existing Indebtedness Refinancing involves the full repayment of all outstanding debts under the Existing Credit Agreement, enhancing the company's financial position[186] - The definition of "Excluded Sources" clarifies the types of proceeds that do not contribute to cash flow calculations, ensuring accurate financial reporting[179] Economic Indicators and Financial Management - The Federal Funds Effective Rate is a key economic indicator that influences borrowing costs and financial strategies for the company[190] - The First Lien Bridge Credit Agreement provides a framework for bridge loans, indicating the company's strategy for short-term financing needs[192] - The definition of "Excluded Taxes" outlines specific tax liabilities that do not affect cash flow calculations, ensuring clarity in financial assessments[181] - The "First Lien Net Leverage Ratio" is calculated as the Total First Lien Indebtedness minus the lesser of$1 billion or Unrestricted Cash, divided by Consolidated EBITDA for the last four fiscal quarters[193] - The benchmark rate floor for the Adjusted Term SOFR Rate is set at 0.0%[196] - A "Foreign Benefit Event" includes unfunded liabilities exceeding legal limits and failure to make required contributions, which could lead to material adverse effects[197] - A "Foreign Subsidiary" is defined as any Restricted Subsidiary organized outside the United States[199]