Item 1.01. Entry Into a Material Definitive Agreement
Senior Facilities
On
• a term loan facility (the "Term Loan Facility") in an aggregate principal amount of$1,935.0 million , with a maturity of seven years; • a delayed draw term loan facility (the " Delayed Draw Term Loan Facility") in an aggregate principal amount of$465.0 million , with a maturity of equal to that of the Term Loan Facility; and • a revolving credit facility (the "Revolving Credit Facility" and, together with the Term Loan Facility and the Delayed Draw Term Loan Facility, the "Senior Facilities"), in an aggregate committed amount of up to$275.0 million , with a maturity of five years.
In addition, the Company may request one or more (i) incremental term loan facilities and (ii) increases in revolving loan commitments, in each case up to a specified amount, plus an additional amount if the Company attains certain leverage ratios, in each case, subject to certain conditions and receipt of commitments by existing or additional lenders. Proceeds of the term loans drawn on the closing date were used to fund the transactions contemplated by the Merger Agreement.
Interest Rates and Fees
Borrowings under the Senior Facilities will bear interest at a rate equal to, at
the option of the Company, either (i) a LIBOR rate determined by reference to
the costs of funds for Eurodollar deposits for the interest period relevant to
such borrowing, adjusted for certain additional costs, subject to a 0.75% LIBOR
floor for the Term Loan Facility and the Delayed Draw Term Loan Facility and a
0.00% LIBOR floor for the Revolving Credit Facility or (ii) a base rate
determined by reference to the highest of (a) the federal funds rate plus 0.50%
per annum, (b) the prime rate on such day and (c) the one-month adjusted LIBOR
plus 1.00% per annum, in each case plus an applicable margin for initial term
loans. The initial applicable margin for borrowings is 3.50% with respect to
LIBOR borrowings and 2.50% with respect to base rate borrowings, in each case
under the Term Loan Facility and the Delayed Draw Term Loan Facility. Until
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In addition to paying interest on outstanding principal under the Senior Facilities, the Company is required to pay a revolving credit commitment fee at a rate equal to 0.250%, 0.375% or 0.50% per annum based on average daily revolving credit exposure under the Revolving Credit Facility in respect of the unutilized commitments thereunder. The Company is also required to pay customary agency fees under each Senior Facility as well as letter of credit participation fees computed at a rate per annum equal to the applicable margin for base rate borrowings on the dollar equivalent of the daily stated amount of outstanding letters of credit, plus such letter of credit issuer's customary documentary and processing fees and charges and a fronting fee computed at a rate equal to 0.125% per annum on the daily stated amount of each letter of credit under the Revolving Credit Facility.
Amortization and Prepayments
The Term Loan Facilities require scheduled quarterly payments on the term loan in quarterly amounts equal to 0.25% of the original principal amount of the term loan until the maturity date thereof.
In addition, the Term Loan Facility and the Delayed Draw Term Loan Facility require the Company to prepay outstanding term loan borrowings, subject to certain exceptions, with:
• 50% (which percentage will be reduced if the Company attains certain leverage ratios) of the Company's annual excess cash flow; • 100% of the net cash proceeds of all non-ordinary course asset sales, other dispositions of property or certain casualty events, in each case subject to certain exceptions and reinvestment rights; and • 100% of the net cash proceeds of any issuance or incurrence of debt, other than proceeds from debt permitted under the Senior Facilities.
The Company may voluntarily repay outstanding loans under the Senior Facilities at any time subject to customary "breakage" costs with respect to LIBOR rate loans and with a prepayment penalty of, in the case of prepayments of the Term Loan Facility and the Delayed Draw Term Loan Facility, prior to the date that is one six months after the closing date, 1.00%, subject to certain exceptions. The same prepayment penalty or fee, as applicable, applies to any refinancing through the issuance or repricing amendment of any debt that results in a repricing event applicable to the term loans resulting in a lower yield.
Collateral and Guarantors
All obligations under the Senior Facilities are unconditionally guaranteed by Parent and each of the Company's existing and future direct and indirect material, wholly owned domestic subsidiaries, subject to certain exceptions. The obligations are secured by a pledge of the Company's capital stock and substantially all of the Company's now existing or after-acquired assets and those of each guarantor, including capital stock of the subsidiary guarantors, in each case subject to certain exceptions.
Restrictive Covenants and Other Matters
The Senior Facilities contain certain customary affirmative covenants and events of default. The negative covenants in the Senior Facilities include, among others, limitations (none of which are absolute) on the Company's, and its restricted subsidiaries' ability to:
• incur additional debt or issue certain preferred shares; • create liens on certain assets; • make certain loans or investments (including acquisitions); • pay dividends on or make distributions in respect of its capital stock or make other restricted payments; • consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; • sell assets;
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• enter into certain transactions with its affiliates; • enter into sale-leaseback transactions; • change its lines of business; • restrict dividends from its subsidiaries or restrict liens; and • modify the terms of certain debt or organizational agreements.
Certain Relationships
The lenders and their affiliates have in the past engaged, and may in the future engage, in transactions with and perform services, including commercial banking, financial advisory and investment banking services, for the Company and its affiliates in the ordinary course of business for which they have received or will receive customary fees and expenses.
Senior Notes
On
The Notes will mature on
The indenture governing the Notes limits the ability of the Company and its restricted subsidiaries, subject to certain exceptions, to incur additional indebtedness or guarantee indebtedness; create liens; declare or pay dividends, redeem stock or make other distributions to stockholders; make investments; merge, amalgamate or consolidate, or sell, transfer, lease or dispose of substantially all of its assets; enter into transactions with affiliates; or agree to certain restrictions on the ability of restricted subsidiaries to make payments to the Company. These covenants are subject to a number of important exceptions and qualifications. Certain of these covenants will be suspended for so long as the Notes have investment grade ratings. In addition, in certain circumstances, if the issuer sells assets or experiences certain changes of control, it must offer to purchase the Notes.
Item 1.02. Termination of a Material Definitive Agreement.
On
Also in connection with the completion of the Merger, as previously disclosed,
on
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 in the Introductory Note and under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
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