Summary
Arch Capital Group Ltd. (ACGL) filed an 8-K on June 29, 2009, detailing amendments to its credit facilities. The key event reported is the Second Amendment to its Second Amended and Restated Credit Agreement and an Amendment to its Letter of Credit and Reimbursement Agreement, both executed on June 26, 2009. These amendments are significant as they permit indebtedness incurred by Arch Investments I LLC for participation in the Term Asset-Backed Securities Loan Facility (TALF).
Key Highlights
- 1Arch Capital Group Ltd. entered into a Second Amendment to its Second Amended and Restated Credit Agreement on June 26, 2009.
- 2A related Amendment to the Letter of Credit and Reimbursement Agreement was also executed on June 26, 2009.
- 3These amendments permit indebtedness for participation in the Term Asset-Backed Securities Loan Facility (TALF) by Arch Investments I LLC, a subsidiary.
- 4Assets and liabilities of Arch Investments I LLC will be excluded from certain calculations under these credit agreements.
- 5The amendments involve multiple lenders and agents, including Barclays Bank Plc, The Bank of New York, Citibank, N.A., ING Bank N.V., Lloyds TSB Bank plc, and JPMorgan Chase Bank, N.A.
- 6The filing is categorized under Item 1.01 (Entry into a Material Definitive Agreement) and Item 2.03 (Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement).
Frequently Asked Questions
The primary purpose of the amendments is to allow Arch Capital Group's subsidiary, Arch Investments I LLC, to incur debt specifically for participating in the Term Asset-Backed Securities Loan Facility (TALF). This facility was a government-sponsored program designed to support the asset-backed securities market.
The amendments create a 'permitted indebtedness' for Arch Investments I LLC's TALF participation. This means that while the subsidiary can take on debt for this purpose, this debt will be treated differently under the main credit agreements. Furthermore, the assets and liabilities of Arch Investments I LLC will be excluded from certain covenant calculations within the credit agreements, potentially providing flexibility in financial management.
Several prominent financial institutions are involved, including Barclays Bank Plc, The Bank of New York, Calyon, New York Branch, Citibank, N.A., ING Bank N.V., London Branch, Lloyds TSB Bank plc, Wachovia Bank, N.A. (as documentation agents), Bank of America, N.A. (as syndication agent), and JPMorgan Chase Bank, N.A. (as administrative agent).