Business Context and Reporting Period
Company: Dice Holdings, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: June 14, 2012
Event: Entry into a new material definitive credit agreement and termination of a prior credit agreement.
Key Financial Metrics and Debt Structure
- New Revolving Facility: $155 million total capacity, maturing June 14, 2017.
- Initial Borrowing: $16.5 million drawn under the new agreement.
- Use of Proceeds: $14.2 million used to repay the existing credit agreement in full; remaining funds used for transaction costs and working capital.
- Interest Rates:
- Eurocurrency rate plus a margin of 1.75% to 2.50%.
- Base rate plus a margin of 0.75% to 1.50%.
- Margins are determined by the Company's consolidated leverage ratio.
- Collateral: Secured by substantially all assets of the Borrowers and guarantors, plus stock pledges from certain foreign subsidiaries.
- Guarantors: JobsintheMoney.com, Inc., Targeted Job Fairs, Inc., and Rigzone.com, Inc.
Material Changes Versus Prior Period
The Company terminated its Existing Credit Agreement dated July 29, 2010, upon full repayment of all outstanding indebtedness, interest, and fees. This was replaced by a new Credit Agreement with a significantly larger revolving facility ($155 million vs. the prior facility's outstanding balance) and a maturity date extended to 2017.
Guidance, Covenants, and Risks
- Financial Covenants: The agreement includes a consolidated leverage ratio and a consolidated interest coverage ratio.
- Negative Covenants: Restrictions include limitations on incurring additional liens, making stock repurchases or dividend payments, making certain investments or acquisitions, and incurring additional indebtedness.
- Events of Default: Acceleration of payment obligations may occur upon non-payment, change of control, or insolvency.
- Prepayment: Revolving loans may be prepaid at any time without penalty, subject to break funding payments if applicable.
Investor Verification Checklist
- Verify the specific terms of the consolidated leverage and interest coverage ratios to assess covenant headroom.
- Confirm the exact amount of transaction costs deducted from the $16.5 million borrowing.
- Review the full Credit Agreement (to be filed as an exhibit) for detailed exceptions to the negative covenants regarding dividends and stock repurchases.
- Monitor the Company's leverage ratio to determine the applicable interest rate margin.