UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
Current Report
Pursuant To Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): March 16, 2007
TENNECO INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 1-12387 76-0515284
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
500 NORTH FIELD DRIVE, LAKE FOREST, ILLINOIS 60045
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (847) 482-5000
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
On March 16, 2007, Tenneco completed the refinancing of its $831 million
senior secured credit facility with a new $830 million senior secured credit
facility, through an amendment and restatement of the prior facility. The
transaction enhances the company's financial flexibility by replacing its
previous Term B facility with an expanded revolver; extending the expiration of
its revolving line of credit to March 2012; extending the maturities of its term
loan facility; and enhancing covenant flexibility. The facility remains secured
by substantially all of the company's domestic assets and pledges of 65 percent
of the stock of certain first-tier foreign subsidiaries, as well as guarantees
by the company's material domestic subsidiaries.
The company used the initial proceeds of the refinancing to repay
approximately $356 million of outstanding term loans under its prior facility
and to replace the $155 million synthetic letter of credit facility and the $320
million revolving line of credit provided under its prior facility. The company
expects to incur total fees and expenses of approximately $6 million in
connection with the amendment and restatement, which fees and expenses will be
capitalized and amortized over the term of the credit facility. In addition, the
company will incur an expense of approximately $5 million, before tax, during
the first quarter of 2007 related to deferred debt issuance costs remaining
under the prior credit facility.
The amended and restated senior credit facility consists of: (i) a $550
million revolving credit facility; (ii) a $150 million term loan A facility; and
(iii) a $130 million tranche B-1/letter of credit facility, which can also be
used as a revolving line of credit. The revolving credit facility requires that
any amounts drawn be repaid by March 2012. The tranche B-1/letter of credit
facility requires that any amounts drawn be repaid by March 2014. The term loan
A facility is payable in quarterly installments commencing in June 2009 that
total $17 million in 2009, $51 million in 2010, $66 million in 2011 and $17
million in 2012. Initial borrowings under the amended and restated senior credit
facility will bear interest at an annual rate equal to the London Interbank
Offering Rate plus a margin of 150 basis points. The interest rate payable under
the revolving credit facility and term loan A facility is subject to change if
the company's consolidated net leverage ratio changes. The company expects this
new facility will reduce its annual interest expense by more than $4 million
annually.
The amended and restated senior credit facility eliminated the fixed charge
coverage ratio required by the prior facility and requires that the company
maintain financial ratios equal to or better than the following consolidated net
leverage ratio (consolidated net indebtedness divided by consolidated EBITDA, in
each case as defined in the facility) and consolidated interest coverage ratio
(consolidated EBITDA divided by consolidated cash interest paid, in each case as
defined in the facility), at the end of each quarter during the period
indicated:
Net Leverage Ratio Interest Coverage Ratio
(maximum) (minimum)
2007 4.25x 2.10x
2008 4.00x 2.10x
2009 3.75x 2.25x
2010 3.50x 2.40x
2011 3.50x 2.55x
2012-2014 3.50x 2.75x
The amended and restated senior credit facility includes customary
provisions that could require all amounts due thereunder to become due and
payable, either automatically or at the option of the lenders, if the company
fails to comply with the terms of the senior credit facility or if other
customary events occur. The amended and restated senior credit facility does not
contain any terms that could accelerate the payment of the facility as a result
of a credit rating agency downgrade.
Copies of the Second Amended and Restated Credit Agreement and the related
Amended and Restated Guarantee and Collateral Agreement are filed as Exhibits
99.1 and 99.2, respectively, to this Form 8-K and are incorporated herein by
reference.
This Current Report on Form 8-K contains forward-looking statements
concerning the impact on Tenneco's interest expense of the refinancing of its
senior credit facility. This forward-looking statement is based on Tenneco's
current level of indebtedness and changes in Tenneco's outstanding debt levels
could cause actual results to differ.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit No. Description
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99.1 Second Amended and Restated Credit Agreement, dated as of
March 16, 2007, among Tenneco Inc., JPMorgan Chase Bank, N.A.,
as administrative agent, and the other lenders party thereto.
99.2 Guarantee and Collateral Agreement, dated as of March 16, 2007
(amending and restating the Guarantee and Collateral Agreement
dated as of November 4, 1999, as previously amended and amended
and restated), among Tenneco Inc., various of its subsidiaries
and JPMorgan Chase Bank, N.A., as administrative agent.
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.
TENNECO INC.
Date: March 22, 2007 By: /s/ Kenneth R. Trammell
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Kenneth R. Trammell
Executive Vice President and
Chief Financial Officer