UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): December 19, 2008
BRUNSWICK
CORPORATION
(Exact
Name of Registrant as Specified in its Charter)
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Delaware
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001-01043
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36-0848180
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(State
or Other Jurisdiction of Incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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1
N. Field Court
Lake
Forest, Illinois
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60045-4811
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (847) 735-4700
(Former
Name or Former Address, if Changed Since Last Report.)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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[
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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[
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
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[
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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[
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01.
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Entry
into a Material Definitive
Agreement.
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On December 19, 2008, Brunswick
Corporation (the “Company”) entered into the Amended and Restated Credit
Agreement (the “Amended Credit Agreement”) with the subsidiaries party thereto,
the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative
agent. The Amended Credit Agreement amends and supplements the
Company’s existing Credit Agreement, dated as of April 29, 2005, by, among other
things:
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●
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Adding
negative covenants and amending existing negative covenants to, among
other things, limit the ability of the Company and certain of its
subsidiaries, subject to exceptions, to, in certain circumstances, (i)
incur indebtedness, (ii) issue preferred stock, (iii) create liens, (iv)
merge or consolidate with certain entities, (v) dispose of property, (vi)
undertake transactions with affiliates, (vii) make investments, loans,
advances, guarantees and acquisitions, (viii) engage in sale and leaseback
transactions, (ix) make restricted payments or payments of certain
indebtedness, (x) enter into restrictive agreements, (xi) amend certain
material documents, (xii) incur amounts in respect of customer finance
program obligations exceeding a certain threshold, (xiii) enter into
certain swap or similar agreements and (xiv) make changes in fiscal
periods or lines of business.
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●
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Amending
the financial covenants to include only a minimum fixed charge coverage
ratio of 1.1 to 1.0, which is applicable only when the Availability (as
defined in the Amended Credit Agreement) falls below certain
thresholds. The Company’s ability to borrow under the facility
can be affected by compliance with the minimum fixed charge
test. During periods when the Company is below this covenant
requirement, borrowing capacity is reduced by the Availability
requirement, which is $60,000,000. The Company expects to be in
compliance with this covenant at year-end. However, current
economic conditions may make compliance with this covenant more difficult
in 2009.
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●
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Adding
a provision that limits the amount that can be borrowed to an amount equal
to the lesser of (x) $400,000,000 and (y) the Borrowing Base, which is
defined as the sum of certain accounts receivable and certain inventory
(each of which will be subject to advance rates agreed by the lenders)
plus an amount of up to $40,000,000 in respect of certain
equipment. Accordingly, the amount that may be borrowed under
the facility will depend upon the amount of the Borrowing
Base. At the closing, the Borrowing Base was approximately
$321,000,000. However, upon the completion of appraisals of
machinery and equipment and the effectiveness of control agreements
related to available cash, the Borrowing Base is expected to increase to
$400,000,000. It is possible that under certain circumstances
in future periods, the Availability under the facility will be less than
$400,000,000.
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The
Amended Credit Agreement also included a minimum EBITDA covenant and a
sublimit under the Borrowing Base which would have been applicable if
certain conditions had not been met at closing, but those conditions were
met on the closing date of the Amended Credit
Agreement.
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Amending
the annual interest rate to be either the Adjusted LIBOR rate plus a
margin of 4.00% or a base rate plus a margin of 3.50%. The base
rate will be the highest of the federal funds rate plus 0.50%, the prime
rate established by JPMorgan Chase Bank, N.A. or the one-month Adjusted
LIBOR rate plus 1.00%.
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2
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Amending
the applicable commitment fee rate on the unused portion of the credit
facility to range from 0.75% to 1.00% per year based on the daily average
utilization of the credit facility.
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Requiring
that the domestic subsidiaries of the Company representing at least 90% of
its consolidated domestic sales and revenues provide guarantees of the
Amended Credit Agreement
obligations.
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Requiring
the Company and the subsidiary guarantors to enter into a pledge and
security agreement with JPMorgan Chase Bank, N.A. as administrative agent,
pursuant to which the obligations of the Company and the guarantees of the
subsidiaries under the Amended Credit Agreement are secured by a first
priority security interest in most of the Company’s and the subsidiary
guarantors’ existing and future accounts receivable, inventory, equipment,
intellectual property, other personal property, equity interests in
substantially all their present and future directly held domestic
subsidiaries and 66% of the equity interests in certain foreign
subsidiaries, in each case, subject to certain
exceptions.
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The Amended Credit Agreement is
attached as Exhibit 10.1. The foregoing description of the Amended
Credit Agreement is qualified in its entirety by reference to the full text of
the Amended Credit Agreement, which is incorporated herein by
reference.
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Item
2.03.
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Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant
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The information set forth above under
Item 1.01 is hereby incorporated by reference into this Item 2.03.
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Item
7.01.
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Regulation
FD Disclosure
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The news
release announcing this matter is furnished as Exhibit 99.1 and incorporated by
reference herein. The information in this Item 7.01 and Exhibit 99.1
shall not be deemed “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, or otherwise subject to the liabilities of
that Section, nor shall it be deemed incorporated by reference into any filing
under the Securities Act of 1933, as amended, except as expressly set forth by
specific reference in such filing.
Statements
made in this Current Report on Form 8-K that are forward-looking involve risks
and uncertainties and are indicated by words such as “may,” “expects” and other
similar words or phrases. Actual events or results may differ materially from
those described herein. These uncertainties include, but are not
limited to, future economic conditions and other risks described in filings with
the SEC such as Brunswick’s most recent Forms 10-K and 10-Q.
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Item
9.01.
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Financial
Statements and Exhibits
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(d) Exhibits.
3
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Exhibit
No.
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Description
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10.1
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Amended
and Restated Credit Agreement, dated as of April 29, 2005, as amended and
restated as of December 19, 2008, between Brunswick Corporation, the
subsidiaries party thereto, the lenders party thereto and JPMorgan Chase
Bank, N.A., as administrative agent, J.P. Morgan Securities Inc. and RBS
Securities Corporation, as joint lead arrangers, J.P. Morgan Securities
Inc., RBS Securities Corporation, Banc of America Securities LLC, SunTrust
Robinson Humphrey, Inc. and Wells Fargo Securities, LLC, as joint
bookrunners, JPMorgan Chase Bank, N.A. and The Royal Bank of Scotland PLC,
as syndication agents, and Bank of America, N.A., SunTrust Bank and Wells
Fargo Bank, National Association, as documentation
agents.
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99.1
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News
Release of the Company issued on December 19,
2008.
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4
Signatures
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
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BRUNSWICK
CORPORATION
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Date:
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December
19, 2008
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By:
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/s/
Peter B. Hamilton
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Peter
B. Hamilton
Senior
Vice President and Chief Financial Officer
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