Business Context and Reporting Period
Company: TTM Technologies, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: September 14, 2012
Event: Entry into a Material Definitive Agreement (Facility Agreement) and amendment to Shareholders' Agreement.
Key Financial Metrics and Debt Structure
This filing details a refinancing transaction rather than operational financial results. Key debt metrics include:
- New Credit Facility Total: $540 million provided by a syndicate of eight banks led by The Hongkong and Shanghai Banking Corporation Limited.
- Use of Proceeds: Repayment of existing $582.5 million credit facilities and working capital for Asia Pacific operations.
- Facility Structure:
- Tranche A: $370 million term loan (4-year maturity).
- Tranche B: $90 million revolving credit facility (3.5-year maturity).
- Tranche C: $80 million letter of credit facility (4-year maturity).
- Interest Rate: LIBOR plus 238 basis points for Tranches A and B.
- Upfront Costs: $6.2 million front-end fee; 0.5% commitment fee on undrawn amounts.
- Repayment Terms: Tranche A requires installments starting 18 months after the agreement date, with subsequent payments every six months.
Note: The filing does not provide current revenue, profit, cash flow, or margin data.
Material Changes Versus Prior Period
The primary material change is the replacement of the existing $582.5 million credit facility with a new $540 million facility. While the total principal amount is reduced by $42.5 million, the new agreement alters the maturity profile and introduces specific covenants regarding ownership structure.
Guidance, Covenants, and Risks
Financial Covenants: The Company must maintain specified ratios for consolidated tangible net worth, gearing ratio, interest cover ratio, leverage ratio, and current assets ratio.
Ownership Covenants: A critical condition of the Facility Agreement is that the "Tang Family" must:
- Beneficially own not less than 15% of the Company's outstanding capital stock.
- Have the power to appoint more than 50% of the directors to the board of TTM Asia Pacific.
Risks and Contingencies: Events of default include failure to pay principal/interest, covenant breaches, material adverse effects, delisting from a U.S. stock exchange, or insolvency. Upon default, lenders may terminate commitments and accelerate debt repayment.
Investor Verification Checklist
- Verify the Company's ability to meet the new 15% minimum ownership threshold for the Tang Family.
- Confirm the Company's compliance with the new financial covenants (gearing, leverage, and interest cover ratios).
- Review the impact of the $6.2 million front-end fee on immediate cash flow.
- Assess the repayment schedule for the $370 million term loan, specifically the first installment due in 18 months.
- Monitor the status of the existing $582.5 million debt to ensure full repayment as intended.