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MarketScreener Homepage  >  Equities  >  Nyse  >  Alliance Data Systems Corporation    ADS

ALLIANCE DATA SYSTEMS CORPORATION

(ADS)
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ALLIANCE DATA SYSTEMS CORP : Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement, Material Modification to Rights of Security Holders, Financial Statements and Exhibits (form 8-K)

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09/23/2020 | 05:04pm EDT

Item 1.01 Entry into a Material Definitive Agreement.

Purchase Agreement On September 17, 2020, Alliance Data Systems Corporation, as the issuer ("Alliance Data" or the "Company"), and certain of its subsidiaries, as guarantors (the "Closing Date Guarantors"), entered into a purchase agreement (the "Purchase Agreement") with BofA Securities, Inc., as the representative of the initial purchasers named in the Purchase Agreement (the "Initial Purchasers"), under which the Company agreed to sell $500 million aggregate principal amount of its 7.000% senior notes due 2026 (the "Notes") to the Initial Purchasers. The Company and the Closing Date Guarantors have agreed to indemnify the Initial Purchasers against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the "Securities Act"), or to contribute to payments the Initial Purchasers may be required to make because of any such liabilities. The offering of the Notes closed on September 22, 2020. The description of the Purchase Agreement herein is qualified in its entirety by reference to the full text of such Purchase Agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated by reference herein.

Indenture

The Notes are governed by an indenture (the "Indenture") dated as of September 22, 2020 among the Company, the Closing Date Guarantors, and MUFG Union Bank, N.A., as trustee. Pursuant to the Indenture, interest on the Notes will accrue at a rate of 7.000% per annum on the principal amount from September 22, 2020, payable semi-annually in arrears on March 15 and September 15 of each year, beginning on March 15, 2021. The Notes will mature on January 15, 2026, subject to earlier repurchase or redemption.

Guarantees

The Notes are guaranteed on a senior unsecured basis by each of the Company's existing and future domestic restricted subsidiaries that incurs or in any other manner becomes liable for any debt under the Company's domestic credit facilities, including the 2017 Credit Agreement (as defined below) (the "Guarantors"), which, on the date of issuance of the Notes, were the Closing Date Guarantors.

Ranking

The Notes rank equally in right of payment to the Company's existing and future senior unsecured debt, including the Company's outstanding 4.750% senior notes due 2024 in the aggregate principal amount of $850 million issued on December 20, 2019 (the "2024 Notes") and the debt under the 2017 Credit Agreement, and senior in right of payment to any future debt that is by its terms expressly subordinated to the Notes. The guarantees rank equally in right of payment to all of the Guarantors' existing and future senior unsecured debt, including their guarantees of the 2024 Notes and the debt under the 2017 Credit Agreement, and senior in right of payment to any existing and future debt that is expressly subordinated in right of payment to the guarantees. The Notes and the guarantees are effectively subordinated to the Company's and the Guarantors' secured debt to the extent of the value of the assets securing such debt. The Notes and the guarantees are structurally subordinated to all existing and future liabilities (including trade payables) of the Company's subsidiaries that do not guarantee the Notes. The Notes rank senior to any Series A Preferred Stock of the Company issued under the Company's Certificate of Designations of Series A Non-Voting Convertible Preferred Stock with respect to rights upon liquidation, winding up and dissolution.

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Optional Redemption The Company may redeem some or all of the Notes at any time on or after September 15, 2022 at the redemption prices listed in the Indenture, plus accrued and unpaid interest, if any, to, but not including, the applicable redemption date. Prior to September 15, 2022, the Company may redeem some or all of the Notes at any time at a redemption price of 100% of the principal amount, plus accrued and unpaid interest, if any, to, but not including, the applicable redemption date, plus a "make-whole" premium. In addition, at any time prior to September 15, 2022, the Company may, with an amount equal to the net cash proceeds of one or more qualified equity offerings, as defined in the Indenture, redeem up to 40% of the aggregate principal amount of the outstanding Notes at a redemption price equal to 107.000% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to, but not including, the applicable redemption date, provided that such redemption occurs within 90 days following the closing of such qualified equity offering and at least 50% of the aggregate principal amount of the Notes originally issued under the Indenture remain outstanding immediately following such redemption.

Change of Control; Mandatory Offer to Repurchase Following Certain Asset Sales Upon the occurrence of certain kinds of changes of control, the Company must offer to purchase the Notes at 101% of their principal amount, plus accrued and unpaid interest, if any, to, but excluding, the date of purchase. If, within 365 days after the sale of certain assets of the Company or its restricted subsidiaries, as defined in the Indenture, the Company does not either repay certain debt or reinvest the excess proceeds of such asset sales as set forth in the Indenture, under certain circumstances the Company must offer to use such excess proceeds to repurchase the Notes on the terms set forth in the Indenture.

Covenants

The Indenture contains covenants that limit, among other things, the Company's ability and the ability of some of its subsidiaries to (i) incur additional debt, (ii) declare or pay dividends, redeem stock or make other distributions to stockholders, (iii) make investments, (iv) create liens or use assets as . . .

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information provided in Item 1.01 above is incorporated herein by reference.

Item 2.04 Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.

The information set forth in Item 1.01 above with respect to the Company's obligation to prepay the term loans under the 2017 Credit Agreement in amount equal to the net proceeds from the offering of the Notes is incorporated herein by reference.

Item 3.03 Material Modification to Rights of Security Holders.

The information set forth in Item 1.01 above with respect to the Indenture's limitations on the payment of dividends, redemption of stock or other distributions to the Company's stockholders is incorporated herein by reference.

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Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.   Document Description

   4.1  *     Indenture, dated as of September 22, 2020, among Alliance Data Systems
              Corporation, certain of its subsidiaries as guarantors and MUFG Union
              Bank, N.A., as trustee (including the form of the Company's 7.000%
              Senior Note due January 15, 2026).

  10.1        Purchase Agreement, dated as of September 17, 2020, by and among
              Alliance Data Systems Corporation, subsidiary guarantors party thereto
              and BofA Securities, Inc., as representative of the several Initial
              Purchasers party thereto.

  10.2        Sixth Amendment to Amended and Restated Credit Agreement, dated as of
              September 22, 2020, by and among Alliance Data Systems Corporation,
              certain of its subsidiaries as guarantors, Wells Fargo Bank, National
              Association, as administrative agent, and various other agents and
              lenders.

104           Cover Page Interactive Data File (embedded within the Inline XBRL
              document).



* Certain exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. Alliance Data hereby undertakes to furnish supplementally copies of any of the omitted exhibits upon request by the U.S. Securities and Exchange Commission.

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© Edgar Online, source Glimpses


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