ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On October 7, 2020, J2 Global, Inc. (the "Company") completed the issuance and
sale of $750 million aggregate principal amount of its 4.625% senior notes due
2030 (the "Notes") in a private offering exempt from registration under the
Securities Act of 1933, as amended (the "Act") (the "Offering"). The Notes were
sold pursuant to a purchase agreement, dated October 2, 2020 (the "Purchase
Agreement"), among the Company, the guarantors party thereto (the "Guarantors")
and Barclays Capital Inc. and Goldman Sachs & Co. LLC, as representatives of the
several initial purchasers (the "Initial Purchasers").
The Company estimates that the net proceeds from the Offering are approximately
$742.4 million, after deducting the Initial Purchasers' discounts and
commissions and the Company's estimated offering expenses. The Company intends
to use the net proceeds from the Offering to redeem the existing $650 million
aggregate principal amount of 6.0% senior notes due 2025 (the "2025 Notes") of
the Company's wholly-owned subsidiaries, J2 Cloud Services, LLC ("J2 Cloud") and
J2 Cloud Co-Obligor, Inc. ("J2 Cloud Co-Obligor"). The Company expects to use
the remainder of the net proceeds from the offering for general corporate
purposes, which may include acquisitions and the repurchase or redemption of
other outstanding indebtedness.
Indenture
The Notes are governed by an indenture dated as of October 7, 2020 (the
"Indenture"), between the Company, the Guarantors and Wilmington Trust, National
Association, as trustee (the "Trustee"). The Notes bear interest at a rate of
4.625% per annum, payable semiannually in arrears in cash on April 15 and
October 15 of each year, commencing on April 15, 2021. The Notes mature on
October 15, 2030, and are senior unsecured obligations of the Company.
The Company may redeem some or all of the Notes at any time on or after
October 15, 2025 at specified redemption prices plus accrued and unpaid
interest, if any, to, but excluding the redemption date. Before October 15,
2023, and following certain equity offerings, the Company also may redeem up to
40% of the Notes at a price equal to 104.625% of the principal amount, plus
accrued and unpaid interest, if any, to, but excluding the redemption date. In
addition, at any time prior to October 15, 2025, the Company may redeem some or
all of the Notes at a price equal to 100% of the principal amount, plus accrued
and unpaid interest, if any, to the redemption date, plus an applicable
"make-whole" premium.
The Indenture contains covenants that will, amongst other things, limit the
Company's ability to (i) pay dividends or make distributions on the Company's
capital stock or repurchase the Company's capital stock; (ii) make certain
restricted payments; (iii) create liens or enter into sale and leaseback
transactions; (iv) enter into transactions with affiliates; (v) merge or
consolidate with another company; and (vi) transfer and sell assets. These
covenants include certain exceptions.
A copy of the Indenture (including the Form of Note) is filed as Exhibit 4.1 to
this Current Report on Form 8-K and is incorporated herein by reference. The
description of the Indenture in this report is only a summary and is qualified
in its entirety by the terms of the Indenture (including the Form of Note).
ITEM 1.02 TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT
6.0% senior notes due 2025
On October 7, 2020, J2 Cloud and J2 Cloud Co-Obligor notified U.S. Bank National
Association, as trustee (the "2017 Trustee") under the indenture, dated as of
June 27, 2017 (the "2017 Indenture"), among J2 Cloud, J2 Cloud Co-Obligor and
the 2017 Trustee, governing the 2025 Notes that J2 Cloud and j2 Co-Obligor would
redeem the 2025 Notes and satisfy and discharge (the "Satisfaction and
Discharge") the 2017 Indenture using the net proceeds from the offering of the
Notes.
On October 7, 2020, J2 Cloud and J2 Cloud Co-Obligor deposited sufficient funds
with the 2017 Trustee to fund the redemption of the outstanding aggregate
principal amount of the 2025 Notes, to pay the redemption premium due in respect
of the redemption of the 2025 Notes and to pay accrued and unpaid interest on
the 2025 Notes to, but
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excluding, the redemption date (the principal, premium and interest collectively
referred to herein as the "Redemption Price"), which will be December 7, 2020
(the "Redemption Date"). The 2017 Trustee has acknowledged that the Satisfaction
and Discharge of the 2017 Indenture was effective on October 7, 2020. The
Redemption Price will be paid to holders of the 2025 Notes on the Redemption
Date.
Credit Agreement
On October 2, 2020, J2 Cloud provided notice of termination of the credit
agreement, dated as of January 7, 2019, by and among J2 Cloud, the lenders from
time to time party thereto and MUFG Union Bank N.A., effective on October 7,
2020, upon completion of the Offering.
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 under Item 1.01 of this Current Report on Form 8-K is
incorporated by reference herein.
ITEM 8.01 OTHER EVENTS
On October 7, 2020, J2 Cloud and J2 Cloud Co-Obligor delivered a notice of
redemption for all of the outstanding 2025 Notes to U.S. Bank National
Association, as trustee, and to the holders of the 2025 Notes. The redemption of
the 2025 Notes is expected to occur on the Redemption Date.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
Exhibit
Number Description
4.1 Indenture dated as of October 7, 2020, between the Company, the
guarantors party thereto and Wilmington Trust, National Association,
as trustee (including Form of Note due 2030).
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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