| Item 1.01 |
Entry into a Material Definitive Agreement. |
Third Amended and Restated Credit Agreement with Bank of America, N.A., as Administrative Agent
On April 15, 2026 (the “Closing Date”), Flowserve Corporation (the “Company”) amended and restated its credit agreement (the “Third Amended and Restated Credit Agreement”) with Bank of America, N.A., as administrative agent, and the other lenders (together, the “Lenders” and each individually, a “Lender”) and letter of credit issuers party thereto. The Third Amended and Restated Credit Agreement, among other things provides for (x) a $1,000.0 million unsecured revolving credit facility (which includes a $750.0 million sublimit for the issuance of letters of credit and a $30.0 million sublimit for swing line loans) and the right, subject to certain conditions including a Lender approving any such increase, to increase the amount of such revolving credit facility by an aggregate amount not to exceed $400.0 million, (y) an unsecured term loan facility in the amount up to $450.0 million and (z) a maturity date for the revolving and term loans of April 15, 2031.
On the Closing Date, approximately $450.0 million was drawn under the term loan facility and approximately $250.0 million was drawn under the revolving credit facility to refinance the existing debt of the Company and to be used for general corporate purposes. As of the Closing Date, the Company had approximately $250 million of revolving loans outstanding, approximately $443.8 million of term loans outstanding and approximately $79.3 million of outstanding letters of credit under the Company’s then-existing Second Amended and Restated Credit Agreement dated as of October 10, 2024, as amended, among the Company, Bank of America, N.A., as administrative agent, swing line lender and a letter of credit issuer, and the other lenders and letter of credit issuers party thereto (the “Existing Credit Agreement”). In connection with the amendment and restatement of the Existing Credit Agreement on the Closing Date, the Company’s outstanding letters of credit under the Existing Credit Agreement were transferred to be under the Third Amended and Restated Credit Agreement. Future draws under the Third Amended and Restated Credit Facility will be subject to various conditions, including the absence of defaults under the Third Amended and Restated Credit Agreement.
The interest rates per annum applicable to the revolving credit facility under the Third Amended and Restated Credit Agreement (other than in respect of swing line loans), and the term loan will be Term Secured Overnight Financing Rate (“Term SOFR”) plus between 1.000% to 1.750%, depending on the Company’s debt rating by either Moody’s Investors Service, Inc. (“Moody’s”) or Standard & Poor’s Financial Services LLC (“S&P”), or, at the option of the Company, the Base Rate (as defined in the Third Amended and Restated Credit Agreement) plus between 0.000% to 0.750% depending on the Company’s debt rating by either Moody’s or S&P. As of the Closing Date, the initial interest rate on the revolving credit facility under the Third Amended and Restated Credit Agreement was the Term SOFR plus 1.375% in the case of Term SOFR loans and the Base Rate plus 0.375% in the case of Base Rate loans, and the initial interest rate on the term loan facility under the Third Amended and Restated Credit Agreement was Term SOFR plus 1.375% in the case of Term SOFR loans and the Base Rate plus 0.375% in the case of Base Rate loans. Beginning on the Closing Date, a commitment fee will be payable quarterly in arrears on the daily unused portions of the revolving facility under the Third Amended and Restated Credit Agreement. The commitment fee will be between 0.080% and 0.250% of unused amounts under the revolving credit facility depending on the Company’s debt rating by either Moody’s or S&P.
The Third Amended and Restated Credit Agreement includes customary representations and warranties, affirmative and negative covenants, and events of default, including maintenance of consolidated net leverage ratios and interest coverage. If an event of default occurs and is continuing, the Lenders have the right to declare all outstanding loans immediately due and payable.
The foregoing description of the Third Amended and Restated Credit Agreement does not purport to be a complete statement of the parties’ rights and obligations under the Third Amended and Restated Credit Agreement and the transactions contemplated therein, and is qualified in its entirety by reference to the Third Amended and Restated Credit Agreement, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K.
