Vertiv Holdings Co

Current report

Restrictive covenants in the credit agreement governing our Senior Unsecured Revolving Credit Facility and the indentures governing our Senior Secured Notes and Senior Notes, and any future debt agreements, could restrict our operating flexibility. Our ability to comply with these covenants and other restrictions contained in such documents is not fully within our control, and breaches could trigger adverse consequences.

Current report

The credit agreement governing our Senior Unsecured Revolving Credit Facility and the indentures governing our Senior Secured Notes and Senior Notes contain covenants and other restrictions that limit certain of our and certain of subsidiaries’ ability to take certain actions. These restrictions, though subject to exceptions, may limit our ability to operate our businesses, and may prohibit or limit our ability to enhance our operations or take advantage of potential business opportunities as they arise.

Current report

Such restrictions include, among other: (a) in the case of our Senior Unsecured Revolving Credit Facility, our ability and in certain cases the ability of our subsidiaries to incur liens, consolidate or merge, incur additional indebtedness and pay dividends and distributions when a default or event of default has occurred and is continuing, in each case, subject to certain thresholds and exceptions, (b) in the case of the Senior Secured Notes, the ability of certain of our subsidiaries to grant liens, undertake mergers and consolidations, dispose of assets, pay dividends or make other restricted payments, incur indebtedness, make certain investments, optionally prepay or modify terms of certain junior indebtedness, enter into transactions with affiliates, in each case, subject to certain thresholds and exceptions, and (c) in the case of our Senior Notes, among other things and subject to certain exceptions, our ability and in certain cases the ability of our subsidiaries to incur certain liens, engage in certain sale and leaseback transactions or consolidate or merge.

Current report

In addition, under our Senior Unsecured Revolving Credit Facility, we are required to comply with a maximum “Consolidated Leverage Ratio” (as defined in the credit agreement that governs our Senior Unsecured Revolving Credit Facility) of 4.00:1.00, calculated on a quarterly basis, as determined on the last day of the most recent fiscal quarter end, with a step-up, at our option, to 4.50:1.00 for the four consecutive fiscal quarters ending after the consummation of an acquisition that involves cash consideration of at least $750 million, subject to certain conditions and limitations contained in the credit agreement governing our Senior Unsecured Revolving Credit Facility.

Current report

Our ability to comply with these covenants and restrictions may be affected by economic conditions and by financial, market and competitive factors, many of which are beyond our control and future periods will also depend substantially on the pricing and sales volume of our products, our success at implementing cost reduction initiatives and our ability to successfully implement our overall business strategy, among other factors. The breach of any of these covenants or restrictions could result in a default under the credit agreement governing the Senior Unsecured Revolving Credit Facility, the indentures governing the Senior Secured Notes and the Senior Notes or any future debt, including as a result of a cross-default, that would permit the applicable note holders or lenders to terminate any outstanding commitments and declare all amounts outstanding thereunder to be due and payable, together with accrued and unpaid interest. In that case, we may be unable to borrow under the Senior Unsecured Revolving Credit Facility, or any future debt, may not be able to repay the amounts due under the Senior Unsecured Revolving Credit Facility, the Senior Secured Notes, the Senior Notes, or any future debt, may not be able to make interest payments on the Senior Unsecured Revolving Credit Facility, the Senior Secured Notes or the Senior Notes and our subsidiaries may not be able make cash available to us, by dividend, debt repayment or otherwise, to enable us to make payments on any future debt, meet other corporate needs or pay dividends. In addition, the noteholders of the Senior Secured Notes or any future secured debtholder, could proceed against the collateral securing that indebtedness. This could have serious consequences to our financial position, results of operations and/or cash flows and could cause us to become bankrupt or insolvent.