| Item 1.01. |
Entry into a Material Definitive Agreement. |
On December 23, 2022 (the “Closing Date”), Mativ Holdings, Inc. (f/k/a Schweitzer-Mauduit International, Inc.), a Delaware corporation (the “Company”) entered into an accounts receivable securitization facility in the aggregate principal amount of up to $175.0 million (the “A/R Facility”) to provide additional liquidity and funding for the ongoing business needs of the Company and its subsidiaries.
The documentation for the A/R Facility includes (i) a Receivables Purchase Agreement, dated as of December 23, 2022 (the “Receivables Purchase Agreement”), by and among Mativ Receivables, LLC, a wholly-owned, consolidated, bankruptcy-remote indirect subsidiary of the Company (the “Seller”), the Company, the persons from time to time party thereto as purchasers (the “Purchasers”), PNC Bank, National Association, as administrative agent (“PNC” or “Administrative Agent”), and PNC Capital Markets LLC, as structuring agent and (ii) a Sale and Contribution Agreement, dated as of December 23, 2022 (the “Sale and Contribution Agreement”). The A/R Facility will terminate on December 23, 2025 unless earlier terminated in accordance with its terms.
In connection with the A/R Facility, the Company and certain wholly-owned direct and indirect domestic subsidiaries of the Company (the “Originators”), have sold and/or contributed, and will continue to sell and/or contribute, all of their accounts receivable generated in the ordinary course of their business (other than certain excluded receivables) and certain related assets (collectively, “Receivables”) to the Seller pursuant to the Sale and Contribution Agreement. Pursuant to the Receivables Purchase Agreement, the Seller may, from time to time, in turn sell Receivables, to the Purchasers, in exchange for payment as set forth in the Receivables Purchase Agreement.
The Seller will pay the applicable Yield Rate (as defined in the Receivables Purchase Agreement) with respect to the investments made by the Purchasers under the Receivables Purchase Agreement. The Seller will also pay certain customary fees under the Receivables Purchase Agreement on a monthly basis.
The Company will be responsible for initial servicing and collection of the Receivables, and provide a customary guaranty of performance of the respective obligations of Originators to the Administrative Agent, Purchasers, and the other secured parties under the Receivables Purchase Agreement. However, neither the Company nor any of the Company’s other subsidiaries is guaranteeing the payment of Seller’s obligations under the Receivables Purchase Agreement, or the creditworthiness of the obligors thereunder.
The Receivables Purchase Agreement and the Sale and Contribution Agreement contain certain customary representations and warranties, affirmative and negative covenants, indemnification provisions, and events of default, including those providing for the acceleration of amounts owed by the Seller to the Purchasers under the Receivables Purchase Agreement upon the occurrence of certain events.
The foregoing descriptions of the Receivables Purchase Agreement and the Sale and Contribution Agreement are qualified in its entirety by reference to the full and complete terms of the Receivables Purchase Agreement and the Sale and Contribution Agreement, which are included as Exhibit 10.1 and Exhibit 10.2, respectively, to this Current Report on Form 8-K and incorporated herein by reference.