SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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): June 28, 2002
Silgan Holdings Inc.
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(Exact Name of Registrant as Specified in Charter)
Delaware 000-22117 06-1269834
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
4 Landmark Square, Stamford, Connecticut 06901
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (203) 975-7110
Item 5. Other Events.
Refinancing of U.S. Senior Secured Credit Facility
On June 28, 2002, we and certain of our wholly owned subsidiaries
completed the refinancing of our previous U.S. senior secured credit
facility by entering into a new $850 million senior secured credit facility
with Deutsche Bank Trust Company Americas, as Administrative Agent, Bank of
America, N.A. and Citicorp USA, Inc., as Co-Syndication Agents, Morgan
Stanley Senior Funding, Inc. and Fleet National Bank, as Co-Documentation
Agents, Deutsche Bank Securities Inc. and Banc of America Securities LLC,
as Joint Lead Arrangers, Deutsche Bank Securities Inc., Banc of America
Securities LLC and Salomon Smith Barney Inc., as Joint Book Managers, and
various lenders. Our new credit facility also contains an incremental
uncommitted term loan facility of up to $275 million.
All amounts owing under our previous U.S. senior secured credit
facility, dated as of July 29, 1997 (as amended), were repaid with proceeds
from loans made under the new credit facility. As result of this
refinancing, we will record an extraordinary charge, net of tax, of
approximately $0.6 million in the second quarter of 2002 for the write-off
of unamortized debt financing costs related to our previous credit
facility.
Description of the New Credit Facility
The following is a summary of certain terms of our new credit facility
and is qualified in its entirety by reference to the agreements filed as
exhibits hereto.
The Available Credit Facility
Our new credit facility provides us with $100 million of term loans
designated A term loans and $350 million of term loans designated B term
loans and provides Silgan Containers Corporation, Silgan Plastics
Corporation and certain of our other wholly owned subsidiaries up to $400
million of revolving loans, letters of credit and swingline loans.
The revolving loans generally can be borrowed, repaid and reborrowed
from time to time until June 28, 2008, on which date all revolving loans
mature and are payable in full. Amounts repaid under the term loans cannot
be reborrowed.
The aggregate amount of revolving loans that may be outstanding at any
time is not subject to any borrowing base limitation. However, the
revolving borrowers are required to maintain, for at least one period of 30
consecutive days during each period beginning January 1 of each year
through December 1 of such year (beginning in 2002), total average
unutilized commitments for revolving loans of at least $90 million.
We may use proceeds from future revolving loans for general corporate
and working capital purposes, including permitted acquisitions.
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The A term loans mature on June 28, 2008 and are payable in
installments as follows:
A Term Loan
Scheduled Repayment Date Amount
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December 31, 2003................... $16,670,000
December 31, 2004................... 16,670,000
December 31, 2005................... 16,670,000
December 31, 2006................... 16,670,000
December 31, 2007................... 16,670,000
A term loan maturity date........... 16,650,000
The B Term Loans mature on November 30, 2008 and are payable in
installments as follows:
B Term Loan
Scheduled Repayment Date Amount
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December 31, 2002....................... $ 1,750,000
December 31, 2003....................... 3,500,000
December 31, 2004....................... 3,500,000
December 31, 2005....................... 3,500,000
December 31, 2006....................... 3,500,000
December 31, 2007....................... 3,500,000
B term loan maturity date............... 330,750,000
Our new credit facility also contains certain mandatory repayment
provisions, including requirements to prepay loans with proceeds received
from the incurrence of certain indebtedness, with proceeds received from
certain asset sales, and, under certain circumstances, with 50% of our
excess cash flow. The mandatory repayment provisions are no more
restrictive in the aggregate than under our previous credit facility.
The incremental uncommitted term loan facility provides, among other
things, that any incremental term loan borrowing shall:
o be denominated in a single currency, either in U.S. dollars or
certain foreign currencies;
o be in a minimum aggregate amount for all lenders participating in
a given tranche of at least $30 million;
o have a maturity date no earlier than the maturity date for the B
Term Loans and a weighted average life to maturity of no less
than the weighted average life to maturity as then in effect for
the B Term Loans; and
o be used to finance permitted acquisitions and refinance any
indebtedness assumed as a part of such permitted acquisition, to
refinance or repurchase permitted subordinated debt and to repay
outstanding revolving loans.
3
Each of the term loans, the revolving loans and, when committed, the
incremental term loans, at our election, may consist of loans designated as
Euro Rate loans or as Base Rate loans. Each of the loans can be converted
from a Base Rate loan into a Euro Rate loan and vice versa. The interest
periods for Euro Rate loans may be one (and under certain circumstances,
less than one), two, three, six or, to the extent available, twelve months.
As of June 28, 2002, the outstanding principal amounts of A term
loans, B term loans and revolving loans under our new credit facility were
$100 million, $350 million and $158 million, respectively. All such
proceeds were used to refinance amounts outstanding under our previous
credit facility and to pay fees and expenses in connection therewith.
Security and Guarantees
Under the terms of a security agreement, a pledge agreement and a
borrowers/subsidiaries guaranty made in favor of the lenders, we and
certain of our subsidiaries guarantee on a secured basis all of the
obligations of the borrowers under the new credit facility and pledge
substantially all of our respective assets and properties as collateral to
secure the obligations under the new credit agreement, subject to limited
exceptions.
Interest and Fees
We pay interest on borrowings under our new credit facility at rates
that are set with reference to our leverage ratio. To the extent that
amounts under our new credit facility remain unused, we pay commitment fees
on the unused portion of the available loan commitment. The commitment fees
are also set with respect to our leverage ratio.
Interest on term loans and revolving loans maintained as Base Rate
loans accrues at floating rates equal to the sum of the Base Rate plus the
applicable margin. The Base Rate is the higher of the prime lending rate of
Deutsche Bank Trust Company Americas or 1/2 of 1% in excess of the
overnight federal funds rate. Interest on term loans and revolving loans
maintained as Euro Rate loans accrues at floating rates equal to the sum of
the applicable margin plus a formula rate called the Eurodollar Rate
determined with reference to the rate offered by Deutsche Bank Trust
Company Americas for dollar deposits in the New York interbank eurodollar
market. The applicable margin varies depending upon our leverage ratio.
Initially, the interest rate for all loans is the Base Rate plus a
margin of 1% or the Eurodollar Rate plus a margin of 2%. After December 31,
2002, the margin will be reset quarterly based on our leverage ratio. Prior
to the refinancing, the interest rate for A term loans and revolving loans
under our previous credit facility was LIBOR plus a margin of 1.0% or the
prime lending rate of Deutsche Bank, and for B term loans an additional
0.5%.
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The revolving borrowers have agreed to pay to the applicable lenders a
commitment commission calculated initially as 0.50% per annum on the daily
average unused portion of the lenders' revolving commitment in respect of
the revolving loans until such revolving commitment is terminated. The
commitment commission rate ranges from 0.250% to 0.500% and is subject to
change on a quarterly basis beginning after December 31, 2002 depending
upon our leverage ratio. Prior to the refinancing, the most recent
applicable commitment commission under our prior credit facility was 0.25%
per annum. Each of the revolving borrowers is also required to pay to the
applicable lenders under our new credit facility a letter of credit fee
equal to the applicable margin in effect from time to time for revolving
loans maintained as Eurodollar loans, and to pay to the issuers of the
letter of credit a facing fee of 1/4 of 1% per annum, in each case
calculated on the aggregate stated amount of all letters of credit for the
stated duration. Additionally, in connection with the closing of our new
credit facility, the agents and the lenders also received certain other
fees.
Certain Covenants
Our new credit facility contains certain financial and operating
covenants that are generally no more restrictive in the aggregate than the
covenants contained in our previous credit facility. Subject to certain
exceptions as described in the new credit facility, the covenants limit,
among other things, our ability to:
o incur additional indebtedness;
o create liens;
o consolidate, merge or sell assets;
o make certain capital expenditures;
o make certain advances, investments and loans;
o enter into certain transactions with affiliates;
o engage in any business other than the packaging business;
o pay dividends; and
o repurchase stock.
Our new credit facility requires our interest coverage ratio for any
test period ended on the last day of a fiscal quarter set forth below not
to be less than the ratio set forth opposite such fiscal quarter below:
Fiscal Quarter Ended Ratio
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June 30, 2002 2.75:1.00
September 30, 2002 2.75:1.00
December 31, 2002 2.75:1.00
March 31, 2003 2.75:1.00
June 30, 2003 2.75:1.00
September 30, 2003 2.75:1.00
December 31, 2003 2.75:1.00
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Fiscal Quarter Ended Ratio
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March 31, 2004 2.75:1.00
June 30, 2004 2.75:1.00
September 30, 2004 2.75:1.00
December 31, 2004 2.75:1.00
March 31, 2005
and the last day of each fiscal
quarter thereafter 3.00:1.00
Our new credit facility also requires our total leverage ratio for any
test period ended on the last day of a fiscal quarter set forth below not
to be greater than the ratio set forth opposite such fiscal quarter below:
Fiscal Quarter Ended Ratio
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June 30, 2002 4.50:1.00
September 30, 2002 4.50:1.00
December 31, 2002 4.50:1.00
March 31, 2003 4.50:1.00
June 30, 2003 4.50:1.00
September 30, 2003 4.25:1.00
December 31, 2003 4.25:1.00
March 31, 2004 4.25:1.00
June 30, 2004 4.25:1.00
September 30, 2004 4.00:1.00
December 31, 2004 4.00:1.00
March 31, 2005 4.00:1.00
June 30, 2005 4.00:1.00
September 30, 2005 and each
fiscal quarter thereafter 3.75:1.00
Events of Default
Our new credit facility contains certain customary provisions
concerning events of default. Upon the occurrence of any such event of
default under our new credit facility, the lenders are permitted, among
other things, to accelerate the maturity of the term loans and the
revolving loans and all other outstanding indebtedness under the facility
and terminate their commitment to make any further revolving loans or to
issue any letters of credit.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
Exhibit No. Description
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99.1 Credit Agreement, dated as of June 28, 2002, among Silgan
Holdings Inc., Silgan Containers Corporation, Silgan Plastics
Corporation, Silgan Containers Manufacturing Corporation, Silgan
Can Company, each other Revolving Borrower party thereto from
time to time, each other Incremental Term Loan Borrower party
thereto from time to time, the lenders from time to time party
thereto, Deutsche Bank Trust Company Americas, as Administrative
Agent, Bank of America, N.A. and Citicorp USA, Inc., as
Co-Syndication Agents, Morgan Stanley Senior Funding, Inc.. and
Fleet National Bank, as Co-Documentation Agents, Deutsche Bank
Securities Inc. and Banc of America Securities LLC, as Joint Lead
Arrangers, and Deutsche Bank Securities Inc., Banc of America
Securities LLC and Salomon Smith Barney Inc., as Joint Book
Managers.
99.2 US Security Agreement, dated as of June 28, 2002, among Silgan
Holdings Inc., Silgan Containers Corporation, Silgan Plastics
Corporation, Silgan Containers Manufacturing Corporation, Silgan
Can Company, Silgan Corporation, Silgan LLC, RXI Plastics, Inc.,
Silgan Vacuum Closure Holding Company and Deutsche Bank Trust
Company Americas, as Collateral Agent.
99.3 US Pledge Agreement, dated as of June 28, 2002, among Silgan
Holdings Inc., Silgan Containers Corporation, Silgan Plastics
Corporation, Silgan Containers Manufacturing Corporation, Silgan
Can Company, Silgan Corporation, Silgan LLC, RXI Plastics, Inc.,
Silgan Vacuum Closure Holding Company and Deutsche Bank Trust
Company Americas, as Collateral Agent.
99.4 US Borrower/Subsidiaries Guaranty, dated as of June 28, 2002,
made by each of Silgan Holdings Inc., Silgan Containers
Corporation, Silgan Plastics Corporation, Silgan Containers
Manufacturing Corporation, Silgan Corporation, Silgan LLC, RXI
Plastics, Inc., Silgan Vacuum Closure Holding Company in favor of
the creditors thereunder.
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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 hereunto duly authorized.
SILGAN HOLDINGS INC.
By: /s/ Anthony J. Allott
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Executive Vice President and Chief
Financial Officer
Date: July 12, 2002
INDEX TO EXHIBITS
Exhibit No. Description
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99.1 Credit Agreement, dated as of June 28, 2002, among Silgan
Holdings Inc., Silgan Containers Corporation, Silgan Plastics
Corporation, Silgan Containers Manufacturing Corporation, Silgan
Can Company, each other Revolving Borrower party thereto from
time to time, each other Incremental Term Loan Borrower party
thereto from time to time, the lenders from time to time party
thereto, Deutsche Bank Trust Company Americas, as Administrative
Agent, Bank of America, N.A. and Citicorp USA, Inc., as
Co-Syndication Agents, Morgan Stanley Senior Funding, Inc.. and
Fleet National Bank, as Co-Documentation Agents, Deutsche Bank
Securities Inc. and Banc of America Securities LLC, as Joint Lead
Arrangers, and Deutsche Bank Securities Inc., Banc of America
Securities LLC and Salomon Smith Barney Inc., as Joint Book
Managers.
99.2 US Security Agreement, dated as of June 28, 2002, among Silgan
Holdings Inc., Silgan Containers Corporation, Silgan Plastics
Corporation, Silgan Containers Manufacturing Corporation, Silgan
Can Company, Silgan Corporation, Silgan LLC, RXI Plastics, Inc.,
Silgan Vacuum Closure Holding Company and Deutsche Bank Trust
Company Americas, as Collateral Agent.
99.3 US Pledge Agreement, dated as of June 28, 2002, among Silgan
Holdings Inc., Silgan Containers Corporation, Silgan Plastics
Corporation, Silgan Containers Manufacturing Corporation, Silgan
Can Company, Silgan Corporation, Silgan LLC, RXI Plastics, Inc.,
Silgan Vacuum Closure Holding Company and Deutsche Bank Trust
Company Americas, as Collateral Agent.
99.4 US Borrower/Subsidiaries Guaranty, dated as of June 28, 2002,
made by each of Silgan Holdings Inc., Silgan Containers
Corporation, Silgan Plastics Corporation, Silgan Containers
Manufacturing Corporation, Silgan Corporation, Silgan LLC, RXI
Plastics, Inc., Silgan Vacuum Closure Holding Company in favor of
the creditors thereunder.
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