CORECIVIC, INC. Item 1.01 Entry into a Material Definitive Agreement.
On
Credit Facilities
The New Credit Facilities are in the aggregate principal amount of
Collateral and Guarantees
The loans and other obligations under the New Credit Facilities are guaranteed by each of the Company's domestic restricted subsidiaries.
The Company's obligations under the New Credit Facilities and the guarantees are secured by, among other things:
• the capital stock (or other ownership interests) of the Company's domestic
restricted subsidiaries, subject to customary exclusions, and 65% of the capital stock (or other ownership interests) of the Company's "first-tier" foreign subsidiaries;
• the accounts receivable of the Company and its domestic restricted
subsidiaries; and
• substantially all of the deposit accounts of the Company and its domestic
restricted subsidiaries.
In the event that (a) the consolidated total leverage equals or exceeds 4.00 to 1.00 or (b) the Company incurs certain debt above a specified threshold, certain intangible assets and unencumbered real estate assets that meet a 50% loan-to-value requirement are required to be added as collateral.
Interest and Fees
The Company's borrowings under the New Credit Facilities, other than the swingline loans, bear interest at rates that, at the Company's option, can be either:
• a base rate defined as the greatest of (a) the
The Wall Street Journal (or another national publication selected by the Administrative Agent), (b) the federal funds rate (as published by theFederal Reserve Bank of New York ), plus 0.50%, (c) the daily BSBY (Bloomberg Short-Term Bank Yield Index) rate for a one month interest period plus 1.00%, and (d) 1.00%, plus, in each case, an applicable margin that varies with the Company's consolidated total leverage ratio; or
• a BSBY rate defined as the greater of (a) the product obtained by multiplying
(i) the BSBY screen rate determined as of the reference time for such interest period with a term equivalent to such interest period by (ii) the regulatory reserve rate, and (b) zero, plus, in each case, an applicable margin that varies with the Company's consolidated total leverage ratio.
The Company's borrowings under the swingline loans bear interest at the base rate plus the applicable margin.
The initial applicable margin for base rate loans is 2.25%, and the initial applicable margin for BSBY loans is 3.25%. The applicable margins will be adjusted quarterly, in each case ten (10) business days after the Administrative Agent's receipt of the Company's quarterly financial statements.
Interest on base rate loans is payable quarterly in arrears, and interest on BSBY loans is payable at the end of each interest period, and in the case of interest periods longer than three months, quarterly.
The Company is also required to pay a commitment fee on the difference between committed amounts under the revolving credit facility and amounts other than swingline loans actually used under the revolving credit facility, which fee initially is 0.45% per annum, subject to adjustment in the same manner as the applicable margins for interest rates.
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Certain Covenants
The New Credit Facilities require the Company to meet certain financial tests, including, without limitation:
• a consolidated total leverage ratio (consolidated total debt net of
unrestricted cash and cash equivalents not exceeding$100 million /consolidated EBITDA) of not more than 4.50 to 1.00;
• a consolidated secured leverage ratio of not more than 2.50 to 1.00
(consolidated secured debt net of unrestricted cash and cash equivalents not exceeding$100 million /consolidated EBITDA); and
• a consolidated fixed charge coverage ratio (consolidated EBITDA/consolidated
fixed charges) of not less than 1.75 to 1.00.
In addition, the New Credit Facilities contain certain customary affirmative and negative covenants.
Events of Default
The New Credit Facilities contains customary events of default, including, without limitation, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to certain other material indebtedness in excess of specified amounts, certain events of bankruptcy and insolvency, certain ERISA events, judgments in excess of specified amounts and change in control.
Certain of the lenders under the New Credit Facilities or their affiliates have provided, and may in the future provide, certain commercial banking, financial advisory, and investment banking services in the ordinary course of business for the Company, its subsidiaries and certain of its affiliates, for which they receive customary fees and commissions.
The foregoing description of the New Credit Facilities does not purport to be complete and is qualified in its entirety by reference to the credit agreement governing the New Credit Facilities, which is attached hereto as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 2.03 Creation of Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
To the extent applicable, the information set forth above under Item 1.01 is hereby incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits 10.1 Third Amended and Restated Credit Agreement, datedMay 12, 2022 104 Cover Page Interactive Data File (the cover page XBRL tags are imbedded in the Inline XBRL document)
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