| Item 1.01. | Entry into a Material Definitive Agreement. |
On April 25, 2023, Hexcel
Corporation (“Hexcel”) entered into a new credit agreement (the “Credit Agreement”) governing its $750
million revolving credit facility (the “Revolver”), which matures on April 25, 2028. The Credit Agreement was entered
into by and among Hexcel, as borrower, the lenders party thereto, Citizens Bank, N.A., as administrative agent for the lenders, and the other institutions party thereto.
On April 25, 2023, Hexcel borrowed $60
million under the Credit Agreement, the proceeds of which were used to repay all amounts, and terminate all commitments, outstanding
under the existing credit agreement by and among Hexcel, as borrower, the lenders party thereto,
Citizens Bank, N.A., as administrative agent for the lenders, and the other institutions party thereto (as amended by the First
Amendment to Credit Agreement, dated as of September 28, 2020, and the Second Amendment to Credit Agreement, dated as of January
28, 2021, the “Terminated Credit Facility”) and to pay fees and expenses in connection with the refinancing. The Terminated
Credit Facility was scheduled to expire on June 20, 2024. No early termination penalties
were incurred by Hexcel as a result of the termination of the Terminated Credit Facility.
Borrowings under the Revolver
will bear interest, at Hexcel’s option, for SOFR rate borrowings at (i) an Adjusted Term SOFR rate (subject to a 0.00% floor),
where such “Adjusted Term SOFR” rate is equal to the Term SOFR rate for the applicable interest period plus 0.10%,
plus the Applicable Margin or (ii) for base rate borrowings, the greatest of (a) the prime rate, (b) the federal funds rate plus
0.50% and (c) the Adjusted Term SOFR rate (subject to a 0.00% floor) for a one-month interest period plus 1.00%, in each case plus
the Applicable Margin. The “Applicable Margin” initially is 1.125% for SOFR rate borrowings and 0.125% for base rate
borrowings, and after the date on which the Agent receives a compliance certificate for the fiscal quarter ending September 30,
2023, can fluctuate, determined by reference to the more favorable to Hexcel of its (x) public debt rating and (y) consolidated
leverage ratio, as specified in the Credit Agreement. Revolving loans may be borrowed, repaid and re-borrowed, and are available
for general corporate purposes (including acquisitions, investments and repayments of indebtedness). Up to $50 million of the Revolver
may be used for letters of credit. The Credit Agreement enables Hexcel, from time to time, to add term loans or to increase the
revolving credit commitment in an aggregate amount not to exceed $500 million.
The Credit Agreement contains customary
covenants that place restrictions on, among other things, the incurrence of debt by any subsidiaries of Hexcel, granting of liens
and sale of all or substantially all of the assets of Hexcel and its subsidiaries taken as a whole. The Credit Agreement also contains
financial covenants that require Hexcel to maintain a minimum interest coverage ratio and a maximum consolidated net leverage ratio.
A violation of any of these covenants could result in an event of default under the Credit Agreement. Upon the occurrence of such
an event of default or certain other customary events of default, payment of any outstanding amounts under the Revolver may be
accelerated and the lenders’ commitments to extend credit under the Credit Agreement may be terminated.
The foregoing summary of the Credit Agreement
does not purport to be complete and is qualified in its entirety by reference to the full text of the Credit Agreement, which is
filed as Exhibit 10.1 hereto and is incorporated herein by reference.