Item 1.01. Entry into a Material Definitive Agreement.
The existing credit facilities of certain subsidiaries of Vantiv, Inc. (the
"Company") were and will be further amended pursuant to that certain Amendment
No. 4, dated as of October 3, 2017 ("Amendment No. 4"), by and among Vantiv,
LLC, a Delaware limited liability company and a majority owned subsidiary of the
Company ("Vantiv, LLC"), various lenders party thereto, Morgan Stanley Senior
Funding, Inc. as Administrative Agent (the "Administrative Agent"), and the
other parties party thereto, which amends that certain second amended and
restated loan agreement, dated as of October 14, 2016, by and among Vantiv, LLC,
Vantiv Holding, LLC, a majority-owned subsidiary of the Company ("Vantiv
Holding"), the Administrative Agent and the lenders and other agents party
thereto (the second amended and restated loan agreement as amended by Amendment
No. 4, the "Credit Agreement").
The Credit Agreement provides for senior secured credit facilities (the "Senior
Secured Credit Facilities") comprised of term A loan tranches, term B loan
tranches and a revolving credit facility. Amendment No. 4 replaced (1) the
existing initial term B loan tranche with a $759.263 million new term B-3 loan
tranche maturing in October 2023 and (2) the existing Rook incremental term B
loan tranche with a $1,270 million term B-4 loan tranche maturing August 2024.
Amendment No. 4 also provides that the $535 million incremental term B-1 tranche
to be funded in connection with the closing of the WorldPay acquisition will,
upon the funding thereof, be modified to have the same economic terms as the new
term B-4 loan tranche, and that upon the effectiveness of the third amended and
restated loan agreement as described in Vantiv's 8-K dated September 11, 2017,
additional and conforming changes shall be made to such loan agreement.
The term B loan tranches amortize in equal quarterly installments of 0.25% per
quarter, with balloon payments at maturity. The amortization for the new term
B-4 tranche will commence on June 30, 2018.
The obligations under the Senior Secured Credit Facilities are unconditionally
guaranteed by Vantiv Holding and certain of Vantiv, LLC's existing and
subsequently acquired or organized domestic subsidiaries. The Senior Secured
Credit Facilities and related guarantees are secured on a first-priority basis
(subject to liens permitted under the Credit Agreement) by a lien on
substantially all the tangible and intangible assets of Vantiv, LLC and the
guarantors, including all of the capital stock held by such obligors (subject to
a 65% limitation on pledges of capital stock of foreign subsidiaries and
domestic holding companies of foreign subsidiaries), subject to certain
Interest on all loans under the Senior Secured Credit Facilities is payable
either quarterly or at the expiration of any LIBOR interest period applicable
thereto. Borrowings under the Credit Agreement accrue interest at a rate equal
to, at Vantiv, LLC's option, a base rate or LIBOR rate plus an applicable
margin. The applicable margin for each of the new term B-3 loan tranche and new
term B-4 loan tranche is 200 basis points in the case of LIBOR loans (subject to
a 0.0% floor) and 100 basis points in the case of base rate loans (subject to a
0.0% floor). The applicable margin for the incremental term B-2 loan tranche
remains 225 basis points in the case of LIBOR loans (subject to a 0.0% floor)
and 125 basis points in the case of base rate loans (subject to a 0.0% floor).
Subject to certain conditions and exceptions, Vantiv, LLC is permitted to make
voluntary prepayments of the loans under the Senior Secured Credit Facilities
and to reduce the existing loan commitments at any time without premium or
penalty, except that, with respect to the term B loan tranches, subject to
certain exceptions, such prepayments are subject to a premium equal to 1.0% of
any of (1) the term B-3 loans prepaid prior to the date that is six months after
the Term B-3 Effective Date (as defined in Amendment No. 4), (2) the term B-4
loans prepaid prior to the date that is six months after the Amendment No. 4
Effective Date (as defined in Amendment No. 4) and (3) the incremental term B-2
loans prepaid prior to the date that is six months after the initial funding of
the incremental term B-2 loans, in each case, with the proceeds of secured term
debt bearing a lower effective interest rate than the debt repaid.
Subject to certain exceptions, Vantiv, LLC is required to prepay borrowings
under the Credit Agreement as follows: (1) with respect to the term loans, with
100% of the net proceeds Vantiv, LLC receives from the incurrence of debt
obligations other than permitted debt obligations, (2) with respect to the term
loans, with 100% of the net proceeds in excess of $10 million individually and
$20 million in the aggregate in any fiscal year that Vantiv, LLC receives from
specified non-ordinary course asset sales or as a result of a casualty or
condemnation events, subject to reinvestment provisions and (3) with respect to
the tranche B term loans only, with 50% of excess cash flow for each fiscal year
of Vantiv, LLC, which percentage is subject to decrease based on Vantiv, LLC's
senior secured leverage ratio.
The Credit Agreement requires Vantiv, LLC to maintain a maximum leverage ratio
(based upon the ratio of total funded debt to consolidated EBITDA) and a minimum
interest coverage ratio (based upon the ratio of consolidated EBITDA to cash
interest expense), each of which are tested quarterly based on the last four
The Credit Agreement contains customary representations and warranties and
affirmative covenants applicable to Vantiv, LLC, Vantiv Holding (in certain
instances) and certain of Vantiv, LLC's subsidiaries and also contains certain
restrictive covenants, including, among others, limitations on: the incurrence
of additional debt, liens on property, acquisitions and investments, loans and
guarantees, mergers, consolidations, liquidations and dissolutions, asset sales,
dividends and other payments in respect of Vantiv, LLC's capital stock,
prepayments of certain debt, transactions with affiliates and modifications of
Vantiv, LLC's organizational documents and certain debt agreements. The Credit
Agreement also contains customary events of default.
The foregoing description of the Credit Agreement and Amendment No. 4 does not
purport to be complete and is qualified in its entirety by reference to
Amendment No. 4, which is incorporated herein by reference as Exhibit 10.1.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information required to be reported under this Item 2.03 is incorporated by
reference from Item 1.01 of this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
10.1 Amendment No. 4, dated as of October 3, 2017, among Vantiv, LLC,
Morgan Stanley Senior Funding, Inc., as Administrative Agent, and the
other lenders party thereto.
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