Item 1.01. Entry into a Material Definitive Agreement.
Indenture
On May 19, 2020, Match Group, Inc. ("Match Group"), a majority-owned, publicly
traded subsidiary of IAC/InterActiveCorp (the "Company"), entered into an
indenture, between Match Group and Computershare Trust Company, N.A., as trustee
(the "Indenture"), in connection with the issuance of $500 million aggregate
principal amount of 4.625% senior notes due 2028 (the "Notes") by way of a
private offering of the Notes by Match Group.
The information set forth under Item 2.03 is incorporated herein by reference.
Item 1.02 Termination of a Material Definitive Agreement.
On May 19, 2020, Match Group satisfied and discharged its obligations under the
indenture, dated as of June 1, 2016, between Match Group, as issuer, and
Computershare Trust Company, N.A., as trustee (the "Trustee"), by irrevocably
depositing with the Trustee funds sufficient to redeem in full the $400 million
aggregate principal amount of its 6.375% Senior Notes due 2024 on June 11, 2020.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 is incorporated herein by reference.
Issuance of Notes
On May 19, 2020, Match Group issued $500 million in aggregate principal amount
of Notes, with gross proceeds from the offering of approximately $500 million.
The proceeds from the issuance of the Notes were used to redeem its outstanding
6.375% senior notes due 2024 and for general corporate purposes.
The Notes accrue interest at a rate of 4.625% per year from the date of
issuance, until maturity or earlier redemption. Interest on the Notes is payable
on June 1 and December 1 of each year, commencing on December 1, 2020. The Notes
mature on June 1, 2028.
At any time prior to June 1, 2023, Match Group has the option to redeem the
Notes, in whole or in part, at a redemption price equal to 100% of the principal
amount of the Notes redeemed plus accrued and unpaid interest, if any, to the
date of redemption and a "make-whole premium." The Notes are redeemable at Match
Group's option, in whole or in part, at any time on or after June 1, 2023, at
specified redemption prices, together with accrued and unpaid interest, if any,
to the date of redemption. In addition, at any time prior to June 1, 2023, Match
Group may redeem up to 40% of the aggregate principal amount of the Notes with
the proceeds of certain equity offerings at a redemption price equal to 104.625%
of the principal amount of the Notes, together with accrued and unpaid interest,
if any, to the date of redemption. Under the terms of the Notes, certain change
of control triggering events will require Match Group to make an offer to
purchase the Notes at a purchase price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest to the purchase date.
The Notes are general unsubordinated unsecured obligations of Match Group, rank
senior in right of payment to all of Match Group's existing and future
obligations that are, by their terms, expressly subordinated in right of payment
to the Notes, rank equally in right of payment with all of Match Group's
existing and future obligations that are not so subordinated, including (i) any
indebtedness outstanding under that certain credit agreement, dated as of
October 7, 2015, as amended and restated on November 16, 2015, as amended
December 16, 2015, as amended December 8, 2016, as amended August 14, 2017, as
amended December 7, 2018, and as amended February 13, 2020, among Match Group,
as borrower, the lenders party thereto, J.P. Morgan Chase Bank, N.A., as
administrative agent, and the other parties thereto, to the extent of the value
of the assets securing such debt, (ii) Match Group's existing senior notes due
2027, (iii) Match Group's existing senior notes due 2029 and (iv) Match Group's
existing senior notes due 2030. The Notes will be structurally subordinated to
all existing and future obligations, including indebtedness, of Match Group's
non-guarantor subsidiaries, including their guarantees of Match Group's credit
facilities. The Notes will be effectively subordinated to Match Group's secured
indebtedness and the secured indebtedness of any of Match Group's subsidiaries
that guarantee the Notes in the future, in each case to the extent of the value
of the assets securing such indebtedness, including Match Group's credit
facilities.
The Indenture contains certain covenants that restrict the ability of Match
Group and its restricted subsidiaries to, among other things: (i) create liens
on certain assets and (ii) consolidate, merge, sell or otherwise dispose of all
or substantially all of Match Group's assets. At any time when the Notes are
rated investment grade by both Moody's and Standard & Poor's and no default or
event of default (both as defined in the Indenture) has occurred and is
continuing under the Indenture, Match Group and its subsidiaries will not be
subject to the covenant requiring future note guarantors.
If an event of default (as defined in the Indenture) occurs and is continuing
(other than specified events of bankruptcy or insolvency with respect to Match
Group or a significant subsidiary), the trustee under the Indenture or the
holders of at least 25% in principal amount of the outstanding Notes have the
ability to declare all the outstanding Notes to be due and payable immediately.
If an event of default relating to specified events of bankruptcy or insolvency
with respect to Match Group occurs, all of the outstanding Notes become
immediately due and payable without any declaration or other act on the part of
the trustee under the Indenture or any holders of the Notes.
The foregoing summary of the Indenture is qualified in its entirety by reference
to the Indenture, which was filed as Exhibit 4.1 to Match Group's Current Report
on Form 8-K, filed on May 20, 2020, and is incorporated into this Current Report
on Form 8-K by reference.
Item 8.01 Other Events.
The offering memorandum used in connection with the offering of the Notes
included the language below as part of a discussion of the impacts from the
current global pandemic on Match Group's business. This language was taken from
statements included in Match Group's Form 10-Q for the quarter ended March 31,
2020 and in its letter to shareholders dated May 5, 2020.
While user engagement metrics have improved, we have also experienced a decline
in new users and paying subscribers during the pandemic. This impact varies
geographically depending on the level of impact of COVID-19 in the region and is
also more pronounced among users over the age of 30. On Tinder, this led to
first-time subscriber declines sequentially from February to March before
stabilizing in April, though first-time subscribers were up meaningfully
year-over year in each month.
Financially, Match Group is well positioned with a reliable source of revenue
from recurring subscriptions and a strong balance sheet. Moreover, nearly
two-thirds of our expense base is variable in nature, providing significant
flexibility. The key components of our variable costs are marketing spend and
cost of revenue, which includes primarily IAP fees and credit card transaction
fees that scale directly with revenue.
Cautionary Statement Regarding Forward-Looking Information
This Current Report on Form 8-K may contain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. The use of
words such as "anticipates," "estimates," "expects," "plans" and "believes,"
among others, generally identify forward-looking statements. These
forward-looking statements include, among others, statements relating to Match
Group's future financial performance and business prospects. These
forward-looking statements are based on Company management's current
expectations and assumptions about future events, which are inherently subject
to uncertainties, risks and changes in circumstances that are difficult to
predict. Actual results could differ materially from those contained in these
forward-looking statements for a variety of reasons. Among the factors that
could cause actual results to differ from those reflected in forward-looking
statements include, without limitation, the risks and uncertainties described in
the Company's filings with the U.S. Securities and Exchange Commission. Other
unknown or unpredictable factors that could also adversely affect the Company's
business, financial condition and results of operations may arise from time to
time. In light of these risks and uncertainties, these forward-looking
statements may not prove to be accurate. Accordingly, you should not place undue
reliance on these forward-looking statements, which only reflect the views of
the Company's management as of the date of this Current Report on Form 8-K. The
Company does not undertake to update these forward-looking statements.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
4.1 Indenture, dated as of May 19, 2020, between Match Group, Inc. and
Computershare Trust Company, N.A., as trustee. (incorporated by
reference herein by reference to Exhibit 4.1 to Match Group's Current
Report on Form 8-K, filed on May 20, 2020)
104 Inline XBRL for the cover page of this Current Report on Form 8-K
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MATCH GROUP, INC. 
