8-KMaterial AgreementsFinancial EventsExhibits & Filings

Blackstone Inc. 8-K Report, Material Agreement (Sep 26, 2018)

Filed September 26, 2018For Securities:BX

Summary

Blackstone Inc. (BX) filed an 8-K on September 25, 2018, to report on the amendment and restatement of its revolving credit facility. This $1.60 billion facility, entered into on September 21, 2018, extends the maturity date to September 21, 2023, and introduces several favorable terms for the company. Key updates include an improved pricing grid based on corporate ratings, increased sub-limits for swingline loans, the addition of Canadian Dollar borrowing capabilities, and enhanced flexibility regarding debt incurrence and restricted payments. Investors should note the increase in the minimum required fee-generating assets under management to $150.0 billion, a key metric for Blackstone's operations. The facility remains unsecured and includes customary covenants, such as a maximum net leverage ratio, with financial covenants tested quarterly. The inclusion of 'realized incentive fees' in the definition of 'Combined EBITDA' is also a notable change, potentially impacting financial metrics.

Key Highlights

  • 1Amended and restated $1.60 billion revolving credit facility entered into on September 21, 2018.
  • 2Extended maturity date from August 31, 2021, to September 21, 2023.
  • 3Updated pricing grid based on corporate ratings to potentially lower interest costs and fees.
  • 4Increased swingline loan sub-limit from $100 million to $150 million.
  • 5Added flexibility to borrow in Canadian Dollars.
  • 6Removed certain restrictions on incurring debt and making restricted payments.
  • 7Increased required minimum fee generating assets under management from $100 billion to $150 billion.
  • 8Included 'realized incentive fees' in the definition of 'Combined EBITDA'.

Frequently Asked Questions

This 8-K filing is primarily to announce the amendment and restatement of Blackstone's $1.60 billion revolving credit facility, updating its terms and extending its maturity date.

The new credit facility offers several benefits, including an extended maturity to September 2023, potentially more favorable pricing based on corporate ratings, increased borrowing capacity for swingline loans, flexibility to borrow in foreign currencies (CAD), and relaxed restrictions on incurring debt and making payments. It also requires a higher minimum of fee-generating assets under management.

The facility includes a maximum net leverage ratio as a financial covenant, tested quarterly. While the credit facility itself is unsecured, the company must adhere to this leverage limit and maintain a minimum amount of fee-generating assets under management. The specific impact on leverage will depend on Blackstone's actual financial performance and borrowing activities under the facility.

The inclusion of 'realized incentive fees' in the definition of 'Combined EBITDA' may lead to a higher reported EBITDA figure, which could positively impact leverage ratios and other financial covenants that reference this metric. Investors should analyze how this change affects the company's reported financial strength and its ability to comply with covenants.