Business Context and Reporting Period
Company: Global Payments Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: October 18, 2018
Event: Entry into a Material Definitive Agreement and Creation of a Direct Financial Obligation.
Key Financial Metrics and Debt Structure
This filing details a restructuring of the company's credit facilities rather than reporting operational financial results (revenue, profit, or cash flow).
- New Facility: $500 million Term Loan B-4 Facility.
- Total Financing Capacity: Increased to $6.0 billion under the amended Credit Agreement.
- Net Debt Impact: Aggregate outstanding debt did not change; proceeds from the new Term Loan were used to repay amounts under the revolving credit facility.
- Maturity Date: October 18, 2025.
- Interest Rates:
- Eurocurrency Loans: Base rate + 1.75% margin.
- Base Rate Loans: Base rate + 0.75% margin.
Material Changes Versus Prior Period
The primary material change is the amendment of the Second Amended and Restated Credit Agreement via the Sixth Amendment. While the total debt principal remained constant due to the swap between revolving and term debt, the capital structure was altered to include a new long-term facility maturing in 2025.
Guidance, Risks, and Covenants
Covenants: The amended agreement includes customary affirmative and restrictive covenants, specifically financial covenants based on net leverage and interest coverage ratios.
Events of Default: The agreement contains standard events of default which, if triggered and not cured, could allow lenders to declare all obligations immediately due and payable.
Outlook: No specific revenue or earnings guidance is provided in this filing.
Key Facts for Investor Verification
- Verify the specific terms of the net leverage and interest coverage ratio covenants in the full Sixth Amendment document.
- Confirm the exact amount of debt shifted from the revolving credit facility to the new Term Loan B-4 Facility.
- Review the full text of the Sixth Amendment, which is referenced as an exhibit to the upcoming Form 10-K for the year ending December 31, 2018.
- Monitor the company's ability to maintain the required financial ratios to avoid an event of default.