8-KMaterial AgreementsFinancial EventsRegulation FD+2

AFFILIATED MANAGERS GROUP, INC. 8-K Report, Material Agreement (Sep 3, 2004)

Filed September 3, 2004For Securities:AMGMGRBMGRMGRDMGRE

Summary

Affiliated Managers Group, Inc. (AMG) reported on August 17, 2004, the entry into a significant new credit facility, designed to replace its existing senior revolving credit line. This Amended and Restated Credit Agreement with Bank of America, N.A. as administrative agent, and other parties, provides for borrowings up to $390 million, with an option to increase this to $450 million subject to lender consent. The facility includes financial covenants related to net worth, leverage, and interest coverage, along with customary operational restrictions. Borrowings are secured by pledges of the Company's capital stock or equity interests. Additionally, on August 30, 2004, AMG secured a $51 million short-term loan from The Bank of New York. The purpose of this loan was to refinance the purchase of certain outstanding senior notes due 2006, which were part of a recently completed tender offer related to the Company's 2001 PRIDES. This short-term financing matures on November 17, 2004, and is collateralized by pledged interests in principal strips of U.S. Treasury securities.

Key Highlights

  • 1Entered into an Amended and Restated Credit Agreement on August 17, 2004, increasing borrowing capacity.
  • 2New credit facility allows for up to $390 million in borrowings, with an option for an additional $60 million.
  • 3The new credit facility replaces a previous $250 million senior revolving credit facility.
  • 4The credit agreement includes standard financial covenants (net worth, leverage, interest coverage) and operational restrictions.
  • 5Secured a $51 million short-term loan on August 30, 2004, to refinance outstanding senior notes.
  • 6The short-term loan matures on November 17, 2004, and is secured by U.S. Treasury securities.
  • 7Announced the formation of Managers Investment Group, LLC via a press release on August 24, 2004.

Frequently Asked Questions

The primary purpose of the new credit facility is to replace AMG's existing $250 million senior revolving credit facility, providing increased borrowing capacity of up to $390 million (with an option to increase to $450 million) to support its operations and strategic initiatives.

The $51 million short-term loan was specifically used to refinance the purchase of certain outstanding senior notes due in 2006. These notes were originally issued with AMG's 2001 PRIDES and were tendered in a recent offer.

The new credit facility contains financial covenants related to the Company's net worth, leverage ratios, and interest coverage ratios, designed to ensure financial health and prudent management. It also includes customary affirmative and negative covenants restricting certain corporate actions like incurring additional debt or paying significant dividends.

For the new credit facility, borrowings are collateralized by pledges of the Company's capital stock or other equity interests. The short-term loan is secured by a pledge of AMG's interests in principal strips of U.S. Treasury securities.