Item 1.01. Entry into a Material Definitive Agreement.
On June 24, 2020, Viasat, Inc. ("Viasat") completed the closing of the sale of
$400.0 million in aggregate principal amount of its 6.500% Senior Notes due 2028
(the "Notes"). The Notes will not initially be guaranteed by any of Viasat's
subsidiaries, but will be jointly and severally guaranteed on a senior unsecured
basis (collectively, the "Guarantees") by any of Viasat's domestic restricted
subsidiaries (such subsidiaries, the "Guarantors") which in the future may
guarantee Viasat's revolving credit facility (as amended, amended and restated
or otherwise modified from time to time, the "Revolving Credit Facility").
The Notes were issued by Viasat pursuant to an Indenture, dated as of June 24,
2020 (the "Indenture"), by and between Viasat and Wilmington Trust, National
Association ("Wilmington Trust"), as trustee, which governs the terms of the
Notes. A copy of the Indenture, which includes the form of the Notes, is
attached hereto as Exhibit 4.1 and is incorporated herein by reference.
Viasat intends to use the net proceeds from the Notes offering (which are
estimated to be approximately $394.6 million, after deducting estimated
commissions and offering expenses) to repay all of its outstanding borrowings
under the Revolving Credit Facility and for general corporate purposes, which
may include financing costs related to the purchase, launch and operation of
satellites, potential acquisitions, joint ventures and strategic alliances,
working capital or capital expenditures.
A brief description of the terms of the Notes and the Indenture follows:
Interest. The Notes will bear interest at a rate of 6.500% per year, payable
semi-annually in arrears in cash on January 15 and July 15 of each year,
beginning on January 15, 2021. Viasat will make each interest payment to the
holders of record of the Notes on the immediately preceding January 1 and July
1.
Maturity. The Notes will mature on July 15, 2028, unless earlier redeemed or
repurchased.
Ranking. The Notes are, and any future Guarantees will be, Viasat's and the
applicable Guarantors' general senior unsecured obligations and rank equally in
right of payment with all of their existing and future unsecured senior
indebtedness, including Viasat's 5.625% Senior Notes due 2025. The Notes are
effectively junior in right of payment to their existing and future secured
indebtedness, including Viasat's obligations under the Revolving Credit
Facility, Viasat's 5.625% Senior Secured Notes due 2027 and Viasat's guarantee
of the direct loan facility with the Export-Import Bank of the United States for
the ViaSat-2 satellite (the "Ex-Im Credit Facility") (in each case, to the
extent of the value of the assets securing such indebtedness), are structurally
subordinated to all existing and future liabilities (including trade payables)
of Viasat's subsidiaries that are not Guarantors (including obligations of the
borrower under the Ex-Im Credit Facility), and are senior in right of payment to
all of Viasat and the applicable Guarantors' existing and future subordinated
indebtedness.
Redemption. Viasat may redeem the Notes, in whole or in part, at any time on or
after July 15, 2023 at the redemption prices set forth in the Indenture, plus
accrued and unpaid interest, if any, to the date of redemption. Prior to
July 15, 2023 Viasat may redeem the Notes, in whole or in part, at a redemption
price equal to 100% of the principal amount thereof plus a "make-whole" premium,
plus accrued and unpaid interest, if any, to the date of redemption. In
addition, prior to July 15, 2023, Viasat may redeem up to 40% of the aggregate
principal amount of the Notes with the net cash proceeds from specified equity
offerings at the redemption price set forth in the Indenture; however, Viasat
may only make these redemptions if at least 50% of the aggregate principal
amount of the Notes issued under the Indenture remains outstanding after such
redemptions. Viasat is not required to make any mandatory redemption or sinking
fund payments with respect to the Notes.
If a "Change of Control Triggering Event" occurs (as defined in the Indenture),
each holder of Notes may require Viasat to repurchase all or a portion of such
holder's Notes at a purchase price equal to 101% of the principal amount of the
Notes, plus accrued and unpaid interest, if any, to the date of purchase.
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Covenants. The Indenture contains covenants limiting Viasat's and its restricted
subsidiaries' ability to, among other things incur, assume or guarantee
additional debt; issue redeemable stock and preferred stock; pay dividends, make
distributions or redeem or repurchase capital stock; prepay, redeem or
repurchase debt that is junior in right of payment to the Notes; make loans and
investments; grant or incur liens; restrict dividends, loans or asset transfers
from restricted subsidiaries; sell or otherwise dispose of assets, including
capital stock of subsidiaries; enter into transactions with affiliates; reduce
Viasat's satellite insurance; and consolidate or merge with, or sell
substantially all of their assets to, another person.
Events of Default. Subject to the terms and conditions of the Indenture, each of
the following, among other events, constitutes an event of default under the
Indenture (after the expiration of the applicable grace periods specified
therein): (1) failure by Viasat to pay interest or premium, if any, on, or the
principal of, the Notes when due; (2) failure by Viasat or any of its restricted
subsidiaries to comply with the covenants in the Indenture; (3) default by
Viasat or any of its restricted subsidiaries under any mortgage, indenture or
instrument securing or evidencing indebtedness with an aggregate principal
amount in excess of $50.0 million with respect to a default in the payment of
principal, interest or premium when due or where such default results in the
acceleration of such indebtedness; (4) failure of Viasat or any of its
significant subsidiaries to satisfy certain final judgments when due;
(5) certain bankruptcy events; and (6) the Guarantee of a Guarantor in certain
circumstances ceasing to be in full force and effect, being declared null and
void in a judicial proceeding or being denied or disaffirmed by such Guarantor.
Upon the occurrence of an event of default under the Indenture, the principal
and accrued interest under the Notes then outstanding may be declared due and
payable, subject to certain limitations.
Securities Laws. The Notes were issued through a private placement to qualified
institutional buyers pursuant to Rule 144A and to non-U.S. persons outside the
U.S. in reliance on Regulation S under the Securities Act of 1933, as amended
(the "Securities Act"). The Notes have not been registered under the Securities
Act, are subject to restrictions on transfer and may only be offered or sold in
transactions exempt from, or not subject to, the registration requirements of
the Securities Act. This Current Report on Form 8-K does not constitute an offer
to sell or buy securities, or the solicitation of an offer to sell or buy any
securities.
The foregoing description of the Indenture does not purport to be complete and
is qualified in its entirety by reference to the complete text of the Indenture,
which is attached hereto as Exhibit 4.1 and is incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of a Registrant.
The information contained in Item 1.01 above is hereby incorporated by reference
into this Item 2.03.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description of Exhibit
4.1 Indenture, dated as of June 24, 2020, between Viasat, Inc. and
Wilmington Trust, National Association, as trustee.
104 Cover Page Interactive Data File (embedded with the Inline XBRL
document).
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