Item 1.01 Entry into a Material Definitive Agreement
On December 18, 2020, GS Investment I, LLC (the "SPV"), a special purpose
vehicle and indirect subsidiary of GreenSky, Inc. (the "Company"), entered into
Amendment No. 3 (the "Credit Agreement Amendment") to the Warehouse Credit
Agreement, dated May 11, 2020 (the "Credit Agreement"), by and among the SPV, as
borrower, the lenders party thereto from time to time (the "Lenders"), and
JPMorgan, as administrative agent. As disclosed in the Form 8-K filed by the
Company with the Securities and Exchange Commission (the "SEC") on May 15, 2020,
the Credit Agreement provides an asset-backed revolving credit facility to
finance purchases by the SPV of participation interests in loans originated
through the GreenSky program (the "SPV Facility").
The Credit Agreement Amendment made the following changes to the SPV Facility,
among others:
•increased the amount of the Lenders' revolving commitment from $300 million to
$555 million, including $500 million under the Class A commitment and $55
million under the Class B commitment;
•established terms for the Class B commitment, including the advance rate for
the Class B loans and an interest rate on the Class B loans under the SPV
Facility equal to a fixed spread over 1-month LIBOR; and
•extended the commitment termination date from May 10, 2021 to December 17, 2021
and extended the maturity date from May 10, 2022 to December 17, 2023.
With the addition of the Class B commitment, the Company now expects that the
advance rate under the SPV Facility will be approximately 84% (on average) of
the principal balance of the purchased participations, an increase from
approximately 70%.
The Company has engaged in, and may, in the future, engage in, other commercial
dealings with JPMorgan and its affiliates in the ordinary course of business.
JPMorgan or its affiliates served as a joint lead book running manager for the
Company's initial public offering; served as exclusive agent in connection with
the Company's 10b5-1 repurchase program; serve as an administrative agent,
collateral agent, issuing bank, joint lead arranger and joint lead bookrunner
for the Company's Credit Agreement dated August 25, 2017, as amended; and served
as a financial advisor to the Company's Board of Directors. JPMorgan has
received, and may, in the future, receive, customary fees and commissions for
those transactions.
For additional information regarding the SPV Facility, see the Form 8-K filed by
the Company with the SEC on May 15, 2020. The foregoing description of the
Credit Agreement Amendment is qualified in its entirety by reference to the
Credit Agreement Amendment, which will be filed as an exhibit to the Company's
Annual Report on Form 10-K for the year ending December 31, 2020.
Cautionary Note Regarding Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements that reflect
the Company's current views with respect to, among other things, the impact of
the SPV Facility on the GreenSky program and the advance rate under the SPV
Facility. You generally can identify these statements by the use of words such
as "outlook," "potential," "continue," "may," "seek," "approximately,"
"predict," "believe," "expect," "plan," "intend," "estimate" or "anticipate" and
similar expressions or the negative versions of these words or comparable words,
as well as future or conditional verbs such as "will," "should," "would,"
"likely" and "could." These statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
included in the forward-looking statements. These risks and
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uncertainties include those risks described in GreenSky's filings with the
Securities and Exchange Commission and include, but are not limited to, risks
related to the extent and duration of the COVID-19 pandemic and its impact on
the Company, its bank partners and merchants, GreenSky program borrowers, loan
demand (including, in particular, for elective healthcare procedures), the
capital markets and the economy in general; the Company's ability to retain
existing, and attract new, merchants and bank partners or other funding
partners, including the risk that one or more bank partners do not renew their
funding commitments or reduce existing commitments; its future financial
performance, including trends in revenue, cost of revenue, gross profit or gross
margin, operating expenses, and free cash flow; changes in market interest
rates; increases in loan delinquencies; its ability to operate successfully in a
highly regulated industry; the effect of management changes; cyberattacks and
security vulnerabilities in its products and services; and the Company's ability
to compete successfully in highly competitive markets. The forward-looking
statements speak only as of the date on which they are made, and, except to the
extent required by federal securities laws, GreenSky disclaims any obligation to
update any forward-looking statement to reflect events or circumstances after
the date on which the statement is made or to reflect the occurrence of
unanticipated events. In light of these risks and uncertainties, there is no
assurance that the events or results suggested by the forward-looking statements
will in fact occur, and you should not place undue reliance on these
forward-looking statements.
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