Item 1.01. Entry into a Material Definitive Agreement
OnSeptember 28, 2022 ,Groupon, Inc. (the "Company") entered into an amendment of its existing credit agreement to modify certain financial covenants and provide for additional flexibility in its operations. Specifically, the Company and certain of its subsidiaries entered into a Third Amendment (the "Amendment") to the Second Amended and Restated Credit Agreement, dated as ofMay 14, 2019 (as amended by the First Amendment, dated as ofJuly 17, 2020 and the Second Amendment, dated as ofMarch 22, 2021 , the "Existing Credit Agreement") withJPMorgan Chase Bank, N.A ., as Administrative Agent, and the other lenders party to that Existing Credit Agreement. Following the date of the Amendment, the Company's requirement to maintain (i) a maximum funded indebtedness to EBITDA ratio of 3.25:1.00 shall be increased to 4.50:1.00 for the fiscal quarters endingSeptember 30, 2022 throughJune 30, 2023 and 4.25:1.00 for the fiscal quarters ending thereafter and (ii) a quarterly minimum liquidity balance (including any undrawn amounts under the credit facility) of at least 70% of the Company's accrued merchant and supplier payables balance shall be changed to require maintenance of a monthly minimum liquidity balance (including any undrawn amounts under the credit facility) of at least 100% of the Company's accrued merchant and supplier payables balance. In addition, for purposes of calculating EBITDA under the Existing Credit Agreement, the Amendment increases the cap on certain add-backs for non-recurring charges, restructuring charges and certain run-rate cost savings and synergies from the greater of (x)$60 million and (y) 20% of EBITDA, to (i)$100 million for the fiscal quarters endingSeptember 30, 2022 andDecember 31, 2022 , (ii)$85 million for the fiscal quarter endingMarch 31, 2023 , (iii)$70 million for the fiscal quarter endingJune 30, 2023 , and (iv)$60 million for each fiscal quarter ending thereafter. The Amendment further restricts certain existing negative covenants, including with respect to the Company's ability to make share repurchases, acquisitions, investments and to incur additional indebtedness and liens. Additionally, going forward, the Amendment requires the Company to deliver to the Administrative Agent certain monthly financial statements. In addition to the foregoing covenant changes, the Amendment modifies the Existing Credit Agreement (as amended, the "Amended Credit Agreement") by reducing the Company's senior secured revolving line of credit from$225 million to$150 million . As ofJune 30, 2022 , the Company had$60 million of borrowings and$23.4 million of letters of credit outstanding under the Existing Credit Agreement. Accordingly, the Company did not repay any of these outstanding amounts in connection with the Amendment. The Company drew an additional$40 million of borrowings under the credit facility on the date of the Amendment. The Amendment replaces LIBOR as a benchmark interest rate under the Existing Credit Agreement with Term SOFR plus a credit spread adjustment of 10 basis points. The Amendment also provides that, from the date of the Amendment through the fiscal quarter endingJune 30, 2023 , the ABR and Canadian prime spreads shall be raised to 1.50%, the fixed rate spreads to 2.50% and the commitment fee to 0.4% on the daily amount of the unused commitments under the Amended Credit Agreement. AfterJune 30, 2023 , the applicable spreads and commitment fee will revert to the levels set by the Existing Credit Agreement, with the addition of a new tier that is applicable when the ratio of funded indebtedness to EBITDA exceeds 3.00:1.00 and provides for ABR and Canadian prime spreads of 1.25%, fixed rate spreads of 2.25% and a commitment fee of 0.4% on the daily amount of the unused commitments under the Amended Credit Agreement. The foregoing description of the Amendment and the Amended Credit Agreement is a summary only. It is qualified in its entirety by reference to the full text of the Amendment and the Amended Credit Agreement, which is attached hereto as Exhibit 10.1 and 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 of this Current Report on Form 8-K is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits: Exhibit No. Description 10.1 Third Amendment, dated as ofSeptember 28, 2022 , among the Company, the subsidiaries of the
Company party thereto, JPMorgan
Chase Bank, N.A. , as Administrative
Agent, and the lenders party
thereto, to the Second Amended and
Restated Credit Agreement, dated
as ofMay 14, 2019 (and as amended by
the First Amendment, dated as
ofJuly 17, 2020 and the Second
Amendment, dated as of
2021), among the Company,JPMorgan Chase Bank, N.A ., as Administrative Agent, and the lenders party thereto . Cover Page Interactive Data File
(embedded within the Inline XBRL
104 document)
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