Business Context and Reporting Period
Company: First Advantage Corporation
Filing Type: Form 8-K (Current Report)
Date of Report: September 28, 2005 (Event Date: September 29, 2005)
Context: The Company announced the execution of a new material definitive agreement regarding its credit facilities.
Key Financial Metrics
This filing reports on the establishment of a new credit facility rather than periodic financial performance. Specific metrics regarding revenue, profit, cash flow, or existing debt levels are not provided in this document.
- New Credit Facility: $225 million revolving credit agreement.
- Letters of Credit Sub-facility: $10 million.
- Swing Loan Facility: Up to $5 million.
- Maturity Date: September 28, 2010.
- Interest Rates: Base Rate (Federal Funds Rate + 0.5% or Prime Rate) or Eurodollar Rate (LIBOR + spread).
Material Changes
The primary material change is the entry into a new Credit Agreement with a bank group led by Bank of America, N.A. This replaces or supplements prior financing arrangements, providing the Company with up to $225 million in available borrowings.
Guidance, Risks, and Covenants
Covenants: The agreement includes standard negative covenants regarding liens, investments, creation of indebtedness, and fundamental changes. It also imposes financial covenants requiring the maintenance of a consolidated leverage ratio and a minimum consolidated fixed charge coverage ratio.
Risks and Default Provisions: In the event of a default, lenders may cease further obligations, declare all amounts immediately due and payable, and require collateral. Certain defaults may trigger automatic acceleration of debt.
Management Commentary: The filing incorporates a press release (Exhibit 99.1) but does not contain additional narrative commentary within the text provided.
Investor Verification Checklist
- Verify the specific interest rate spreads over LIBOR and the Base Rate defined in the full Credit Agreement.
- Confirm the exact thresholds for the consolidated leverage ratio and fixed charge coverage ratio covenants.
- Review the full text of the negative covenants to assess restrictions on future business operations or acquisitions.
- Check subsequent filings to determine if any amounts were drawn against the $225 million facility.