Argan Inc. Secures $150M Credit Facility

TL;DR

Argan just inked a $150M credit line with Bank of America. Big moves ahead?

AI Summary

On May 24, 2024, Argan Inc. entered into a material definitive agreement, specifically a credit agreement with Bank of America, N.A. This agreement establishes a revolving credit facility with a principal amount of $150 million. The agreement also includes provisions for a term loan facility, though specific details on its principal amount are not immediately available in this excerpt.

Why It Matters

This new credit facility provides Argan Inc. with significant financial flexibility for potential future investments, acquisitions, or operational needs.

Risk Assessment

Risk Level: low — The filing details a standard credit agreement, which is a common and generally low-risk financial transaction for a company.

Key Numbers

• $150M — Revolving Credit Facility (Provides Argan Inc. with significant borrowing capacity.)

Key Players & Entities

• Argan Inc. (company) — Registrant
• Bank of America, N.A. (company) — Lender
• $150 million (dollar_amount) — Principal amount of revolving credit facility
• May 24, 2024 (date) — Date of earliest event reported

FAQ

Key Financial Figures

• $0.15 — e on Which Registered: Common Stock, $0.15 Par Value AGX New York Stock Exchan
• $50.0 million — the base lending commitment amount from $50.0 million to $35.0 million, increases the letter
• $35.0 m — commitment amount from $50.0 million to $35.0 million, increases the letter of credit f
• $30.0 m — allows for an additional commitment of $30.0 million, subject to certain conditions, t
• $10.0 million — s, that represents an increase from the $10.0 million accordion provided by our expiring cred
• $25.0 m — a companion facility, in the amount of $25.0 million, pursuant to which the Company's

Filing Documents

• agx-20240524x8k.htm (8-K) — 55KB
• agx-20240524xex10d1.htm (EX-10.1) — 1027KB
• agx-20240524xex10d2.htm (EX-10.2) — 145KB
• agx-20240524xex10d3.htm (EX-10.3) — 101KB
• agx-20240524xex10d2001.jpg (GRAPHIC) — 3KB
• agx-20240524xex10d2002.jpg (GRAPHIC) — 6KB
• 0001558370-24-008828.txt ( ) — 1665KB
• agx-20240524.xsd (EX-101.SCH) — 3KB
• agx-20240524_lab.xml (EX-101.LAB) — 16KB
• agx-20240524_pre.xml (EX-101.PRE) — 10KB
• agx-20240524x8k_htm.xml (XML) — 5KB

01. Entry into a Material Definitive Agreement

Item 1.01. Entry into a Material Definitive Agreement. On May 24, 2024, Argan, Inc. (the "Company") and certain of its subsidiaries, as borrowers, entered into the Second Amended and Restated Replacement Credit Agreement with Bank of America, N.A. (the "Bank"), as the lender, with an expiration date of May 31, 2027 (the "New Credit Agreement"). The New Credit Agreement supersedes the expiring credit agreement, as amended, that was executed on May 15, 2017, reduces the base lending commitment amount from $50.0 million to $35.0 million, increases the letter of credit fees to be consistent with current market conditions, and establishes the interest rate for revolving loans at the Secured Overnight Financing Rate ("SOFR") plus 1.85%. In addition to the base commitment, the facility includes an accordion feature that allows for an additional commitment of $30.0 million, subject to certain conditions, that represents an increase from the $10.0 million accordion provided by our expiring credit agreement. The Company may use the borrowing ability to cover other credit instruments issued by the Bank for the Company's use in the ordinary course of business as defined in the New Credit Agreement. Further, on May 31, 2024, the Company completed the negotiation of a companion facility, in the amount of $25.0 million, pursuant to which the Company's Irish subsidiary, Atlantic Projects Company Limited ("APCL"), may cause the Bank's European entity to issue letters of credit on its behalf (the "Master Issuance and Indemnity Agreement") that will be secured by a blanket parent company guarantee issued by the Company to the Bank (the "Guarantee of Payment Agreement"). Together, the New Credit Agreement, the companion facility, and the parent company guarantee are hereinafter referred to as the "Credit Facilities." The Credit Facilities include customary terms, covenants and events of default for credit facilities of this size and nature. Despite the reduction in the base amo

01. Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits. (d) Exhibits Exhibit No. Description 10.1 Second Amended and Restated Replacement Credit Agreement, dated May 24, 2024, among Argan, Inc. and certain subsidiaries of Argan, Inc., as borrowers, and Bank of America, N.A., as the lender. 10.2 Master Issuance and Indemnity Agreement, dated May 31, 2024, between Atlantic Projects Company Limited and Bank of America, N.A. 10.3 Guarantee of Payment Agreement, dated May 24, 2024, between Argan, Inc. and Bank of America, N.A. 104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

SIGNATURES

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. ARGAN, INC. Date: May 31, 2024 By: /s/ Richard H. Deily Richard H. Deily Senior Vice President, Chief Financial Officer, Treasurer and Corporate Secretary

View Full Filing

View this 8-K filing on SEC EDGAR