Business Context and Reporting Period
Company: Artisan Partners Asset Management Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: June 6, 2019
Event: Entry into a Material Definitive Agreement regarding a private placement of senior notes.
Key Financial Metrics and Debt Obligations
This filing details a new debt instrument rather than reporting operational financial results (revenue, profit, or cash flow) for a specific period.
- New Debt Issuance: $50 million in Series E Senior Notes.
- Interest Rate: 4.53% per annum.
- Maturity Date: August 16, 2027.
- Closing Date: August 16, 2019 (subject to conditions).
- Guarantor: Artisan Partners Limited Partnership (wholly-owned subsidiary).
Material Changes and Covenants
The filing establishes new financial covenants and prepayment triggers that were not present in prior agreements:
- Leverage Ratio: Must not exceed 3.00 to 1.00.
- Interest Coverage Ratio: Must not be less than 4.00 to 1.00 for any four consecutive fiscal quarters.
- Prepayment Triggers:
- Occurrence of a Change of Control.
- Artisan's average Assets Under Management (AUM) for a fiscal quarter falls below $45 billion.
Guidance, Risks, and Contingencies
Risks and Contingencies:
- Default Risk: The agreement includes customary events of default. Upon default, the Series E Notes generally become due and payable immediately.
- AUM Sensitivity: The company faces a mandatory prepayment obligation if its average quarterly AUM drops below the $45 billion threshold, creating a liquidity contingency tied to asset flows.
Management Commentary: The filing does not contain forward-looking guidance or management commentary beyond the terms of the Note Purchase Agreement.
Investor Verification Checklist
- Verify the company's current Leverage Ratio and Interest Coverage Ratio to ensure compliance with the new 3.00:1 and 4.00:1 covenants.
- Monitor quarterly Assets Under Management (AUM) to assess the risk of triggering the $45 billion prepayment threshold.
- Confirm the satisfaction of closing conditions for the $50 million note issuance scheduled for August 16, 2019.
- Review the full text of the Note Purchase Agreement (Exhibit 10.1) for specific definitions of "Leverage Ratio" and "Interest Coverage Ratio."