SWITCH, INC. Item 1.01. Entry into a Material Definitive Agreement.
Indenture relating to the Issuance of 3.75% Senior Notes due 2028 by
On
The Notes were issued pursuant to an Indenture, dated as of
The Indenture provides that the Notes will bear interest at a rate of 3.75% per
annum, payable in cash semi-annually in arrears on
Prior to
The Issuer may redeem some or all of the Notes on or after
Year Price 2023 101.875 % 2024 100.938 % 2025 and thereafter 100.000 %
In addition, at any time prior to
The Notes are the general unsecured obligations of the Issuer and the guarantors. The note guarantees will be the senior unsecured obligations of each such guarantor. Under certain circumstances, the guarantors may be released from their note guarantees without consent of the holders of Notes. Under the terms of the Indenture, the Notes rank equally in right of payment with all of Issuer's and the guarantors' existing and future senior indebtedness, and rank contractually senior in right of payment to the Issuer's and the guarantors' future indebtedness
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and other obligations that are, by their terms, expressly subordinated in right of payment to the Notes. The Notes are effectively subordinated to the Issuer's and the guarantors' existing and future secured indebtedness, including secured indebtedness under the Issuer's senior secured credit facilities, to the extent of the value of the assets securing such indebtedness. The Notes and guarantees are structurally subordinated to all existing and future indebtedness and liabilities (including trade payables) of the Issuer's subsidiaries that do not guarantee the Notes.
No later than 30 days after the occurrence of a Change of Control (as defined in the Indenture), the Issuer will be required to offer to repurchase the Notes at a price equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase. If holders of not less than 90% in aggregate principal amount of the outstanding Notes validly tender and do not withdraw such Notes in connection with any tender offer or other offer to purchase the Notes (including pursuant to a Change of Control Offer (as defined in the Indenture), an Alternate Offer (as defined in the Indenture) or an offer to purchase with the proceeds from any Asset Disposition (as defined in the Indenture) and the Issuer, or any other person making such offer in lieu of the Issuer, purchases all of the Notes validly tendered and not validly withdrawn by such holders, the Issuer will have the right, upon not less than ten nor more than 60 days' prior notice, to redeem all Notes that remain outstanding following such purchase at a redemption price in cash equal to the applicable price paid to holders in such purchase, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. If the Issuer sells assets, it will be required under certain circumstances to offer to purchase the Notes.
The Indenture contains covenants that, subject to exceptions and qualifications, among other things, limit the Issuer's ability and the ability of its Restricted Subsidiaries (as defined in the Indenture) to (i) incur additional indebtedness and guarantee indebtedness; (ii) pay dividends or make other distributions or repurchase or redeem the Company's or any parent's capital stock; (iii) prepay, redeem or repurchase certain indebtedness; (iv) issue certain preferred stock or similar equity securities; (v) make loans and investments; (vi) dispose of assets; (vii) incur liens; (viii) enter into transactions with affiliates; (ix) enter into agreements restricting its subsidiaries' ability to pay dividends; and (x) consolidate, merge or sell all or substantially all of its assets.
The Indenture contains customary events of default including, without limitation, failure to make required payments, failure to comply with certain agreements or covenants, cross-acceleration to certain other indebtedness in excess of specified amounts, certain events of bankruptcy and insolvency, and failure to pay certain judgments. An event of default under the Indenture will allow either the trustee or the holders of at least 25% in aggregate principal amount of the then outstanding Notes to accelerate, or in certain cases, will automatically cause the acceleration of, the maturity of the principal of, and accrued and unpaid interest, if any, on all outstanding Notes.
The foregoing description of the Indenture is qualified in its entirety by reference to the terms of the Indenture, which is attached hereto as Exhibit 4.1 and incorporated herein by reference. The foregoing description of the Notes is qualified in its entirety by reference to the terms of the Notes, the form of which is attached hereto as Exhibit 4.2 and incorporated herein by reference.
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Amendment to Amended and Restated Credit Agreement
On
The terms of the Second Amendment, among other things, (1) modify the financial
covenant from a consolidated total leverage ratio to a consolidated secured
leverage ratio (which only includes indebtedness that is secured by a lien on
assets of the Borrower and its subsidiaries), and set such consolidated secured
leverage ratio at 4.00x for each fiscal quarter; (2) extend the maturity of the
Borrower's revolving credit facility to
The foregoing description of the Second Amendment is not intended to be complete and is qualified in its entirety by reference to the Second Amendment, a copy of 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 set forth in Item 1.01 hereto with respect to the Indenture and the Notes is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
4.1 Indenture governing the Issuer's 3.75% Senior Notes due 2028, dated
September 17, 2020 , by and among the Issuer, the guarantors named
therein and U.S. Bank National Association , as trustee
4.2 Form of 3.75% Senior Note due 2028 (included in Exhibit 4.1)
10.1 Second Amendment to Amended and Restated Credit Agreement, dated
September 17, 2020 , by and among Switch, Ltd. , the guarantors party
thereto, the lenders party thereto and Wells Fargo Bank, National
Association , as administrative agent
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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