Business Context and Reporting Period
Company: TTM Technologies, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: May 22, 2015
Event: Entry into a Material Definitive Agreement (Facility Agreement) with The Hongkong and Shanghai Banking Corporation Limited (HSBC).
Key Financial Metrics and Debt Structure
This filing details a new credit facility rather than reporting period-end financial performance metrics such as revenue or profit. Key terms of the new debt instrument include:
- Total Credit Facility: $150 million.
- Structure:
- Revolving credit facility: Up to $150 million.
- Letter of credit facility: Up to $100 million.
- Note: Combined outstanding amounts under both tranches cannot exceed $150 million or the applicable borrowing base.
- Interest Rate: London Interbank Offered Rate (LIBOR) plus 175 basis points.
- Maturity: Five years.
- Collateral: Secured by assets of Oriental Printed Circuits Limited (OPC), including a fixed charge over certain bank accounts and an assignment of account receivables.
- Guarantors: TTM Technologies (Asia Pacific) Limited and other PCB subsidiaries.
- Fees:
- Commitment fee: 0.375% per annum on undrawn amounts.
- Structuring fee: $75,000.
- Underwriting fee: $1,800,000.
- Letter of credit fees: 1.75% on the face amount of issued letters.
Material Changes Versus Prior Period
The filing does not provide comparative financial data (e.g., revenue or earnings changes) against a prior period. The material change reported is the establishment of a new $150 million credit facility to finance working capital requirements for the Asia Pacific region and general corporate purposes, including the payment of intercompany debt.
Guidance, Risks, and Covenants
Covenants: The agreement includes financial, operational, and informational covenants. Specifically, the Company must maintain a consolidated fixed charge coverage ratio (EBITDA to fixed charges) upon the occurrence of certain events.
Events of Default: Lenders may terminate commitments or accelerate debt upon events including:
- Failure to pay principal, interest, or other amounts when due.
- Failure to comply with covenants or breach of representations.
- Non-payment or acceleration of other material debt.
- Occurrence of a material adverse effect.
- Failure of the Company to be listed on a U.S. stock exchange.
- Certain insolvency events.
Outlook: The filing does not contain forward-looking guidance on revenue or earnings.
Investor Verification Checklist
- Verify the impact of the $1.875 million in upfront fees (structuring and underwriting) on current period expenses.
- Confirm the Company's current consolidated fixed charge coverage ratio to ensure compliance with the new covenant requirements.
- Review the specific definition of "Eligible Accounts" to understand the borrowing base limitations.
- Assess the extent of intercompany debt payments planned under this facility.
- Monitor the Company's listing status on U.S. stock exchanges as a condition to avoid default.