Business Context and Reporting Period
Company: Affiliated Managers Group, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: November 3, 2011
Event: Entry into a Material Definitive Agreement (Senior Unsecured Credit Facility).
Key Financial Metrics and Debt Structure
The filing details the establishment of a new $1.0 billion senior unsecured credit facility. The filing text does not provide revenue, profit, cash flow, or margin data.
| Component | Amount | Maturity Date |
|---|---|---|
| Revolving Facility (Revolver) | $750 million | $720 million matures Nov 3, 2016; $30 million matures Jan 12, 2015 |
| Term Loan | $250 million | Nov 3, 2016 |
| Total Facility | $1.0 billion | N/A |
Repayment Terms: Scheduled quarterly payments on the Term Loan begin on the last business day of December 2014, equal to 6.25% of the original principal amount plus any incremental term loans.
Expansion Options: The Company may increase the Revolver by up to $150 million and the Term Loan by up to $250 million, subject to conditions.
Administrative Agent: Bank of America, N.A.
Material Changes Versus Prior Period
This agreement amends and restates the Company's previous senior unsecured revolving credit facility dated January 12, 2011 (and amended July 5, 2011). The primary material change is the addition of a new $250 million Term Loan facility and the restructuring of the revolving component.
Covenants, Risks, and Contingencies
The Credit Facility includes financial covenants regarding leverage and interest coverage. It also contains customary affirmative and negative covenants, including limitations on:
- Priority indebtedness
- Liens
- Cash dividends
- Asset dispositions
- Fundamental corporate changes
The agreement includes customary events of default similar to the Previous Facility. The full text of the credit agreements is attached as Exhibits 10.1 and 10.2.
Investor Verification Checklist
- Verify the specific leverage and interest coverage ratios required by the new financial covenants in Exhibit 10.1 and 10.2.
- Confirm the current utilization of the $750 million Revolver and the drawdown status of the $250 million Term Loan.
- Review the conditions precedent required to exercise the expansion options ($150 million Revolver / $250 million Term Loan).
- Assess the impact of the 6.25% quarterly amortization on the Term Loan starting December 2014 on future liquidity.
- Check for any existing indebtedness that may be restricted by the new limitations on priority indebtedness.