UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM8-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): May 22, 2019
Service Corporation International
(Exact Name of Registrant as Specified in Charter)
Texas | 1-6402-1 | 74-1488375 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
1929 Allen Parkway
Houston Texas
77019
(Address of Principal Executive Offices, and Zip Code)
(713)522-5141
Registrant’s Telephone Number, Including Area Code
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule14a-12 under the Exchange Act (17 CFR240.14a-12) |
☐ | Pre-commencement communication pursuant to Rule14d-2(b) under the Exchange Act (17 CFR240.14d-2(b)) |
☐ | Pre-commencement communication pursuant to Rule13e-4(c) under the Exchange Act (17 CFR240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common Stock ($1 par value) | SCI | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule12b-2 of the Securities Exchange Act of 1934 (17 CFR§240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 | Entry into a Material Definitive Agreement |
On May 22, 2019, Service Corporation International (the “Company”) entered into a new senior unsecured credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and certain other financial institutions, as lenders, providing for a $650 million senior term loan facility, maturing in May 2024 (the “Term Loan A”), and a revolving credit facility providing for borrowings of up to $1 billion, with commitments expiring and loans maturing in May 2024 (the “Revolving Facility” and, together with the Term Loan A, the “Credit Agreement”).
All of the indebtedness outstanding under the Credit Agreement is guaranteed by the Company’s current and future domestic subsidiaries (other than certain excluded subsidiaries).
The loans under the Credit Agreement will bear interest per annum, at the Company’s election, equal to:
• | An alternate base rate plus the applicable margin for such loans. The alternate base rate is the highest of (a) the Federal Funds Effective Rate plus 1/2 of 1%, (b) the rate of interest in effect for such day as publicly announced from time to time by JPMorgan Chase Bank, N.A as its “prime rate,” and (c) the adjusted LIBOR rate for aone-month interest period beginning on such day plus 1.00%; or |
• | the LIBOR rate for the selected interest period plus the applicable margin for such loans. |
The applicable margin ranges from 1.75% to 1.00% for borrowings based on the LIBOR Rate and .75% to 0.00% for borrowings based on the alternate base rate depending on the Company’s leverage ratio.
Customary fees are payable in respect of the Credit Agreement, including letter of credit fees and commitment fees.
The Credit Agreement includes a number of negative covenants that, among other things, limit or restrict the ability of the Company and its other subsidiaries (including the guarantors) to, subject to certain exceptions, incur additional indebtedness (including guarantees), grant liens, make investments, make dividends or distributions with respect to the Company’s capital stock, make prepayments on other indebtedness, engage in mergers or change the nature of the business of the Company or its other subsidiaries (including the guarantors). In addition, the Company is required to comply with a leverage ratio of 4.75 to 1.00 (with a step up to 5.25 to 1.00 for the three consecutive fiscal quarters ended immediately following the consummation of a qualified acquisition) and an interest coverage ratio of 3.00 to 1.00 as of the end of any fiscal quarter.
The Credit Agreement also contains certain affirmative covenants, including financial and other reporting requirements, applicable to the Company and its other subsidiaries (including the guarantors).
A copy of the Credit Agreement is attached as Exhibit 10.1 and is incorporated herein by reference.
Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information provided in Item 1.01 of this Form 8-K is hereby incorporated by reference into this Item 2.03.
Item 8.01 | Other Information |
On May 23, 2019, the Company issued a press release announcing the entering into of the Credit Agreement.
The press release relating to the Credit Agreement is attached as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01 | Financial Statements and Exhibits |
(d) The following exhibits are included with this report:
Signature
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.
May 23, 2019 | By: | /s/ Eric D. Tanzberger | ||||
Eric D. Tanzberger Senior Vice President Chief Financial Officer |