Summary
This 8-K filing by GLOBAL PAYMENTS INC. (GPN) on November 23, 2004, announces the entry into an amended and restated credit facility by its wholly owned subsidiary, Global Payments Direct, Inc. The new "Canadian Credit Facility" replaces an existing one and is designed to provide working capital for Canadian merchants, enabling "same day value" for their VISA credit card deposits. This new facility offers enhanced liquidity for a key operational aspect of GPN's Canadian business, allowing for quicker merchant settlements.
Key Highlights
- 1Global Payments Direct, Inc. entered into an amended and restated Canadian Credit Facility effective November 23, 2004.
- 2The facility is with Canadian Imperial Bank of Commerce (CIBC) as administrative agent and a syndicate of lenders, including Bank of America and JP Morgan Chase.
- 3The primary purpose is to provide working capital for Canadian merchants to receive "same day value" on VISA credit card deposits.
- 4The facility comprises a CAD $100 million revolving line (Tranche A Loans) provided by a U.S. bank syndicate and a CAD $75 million revolving line (Tranche B Loans) provided by CIBC.
- 5The credit facility is secured by a first priority security interest in accounts receivable from VISA Canada/International and related bank accounts.
- 6The facility has an expiration date of November 18, 2005, with renewal options for up to two 364-day periods.
- 7An affiliate of CIBC currently holds approximately 16% of Global Payments' outstanding common stock.
Frequently Asked Questions
The new Canadian Credit Facility is designed to provide working capital for Global Payments Direct, Inc. to offer "same day value" to Canadian merchants for their VISA credit card deposits. This means merchants receive funds on the day of the sale, even if settlement from VISA occurs later.
The facility has two main components: a revolving line of up to CAD $100 million (approximately $84 million USD) for Tranche A Loans, provided by a syndicate of U.S. banks, and a revolving line of up to CAD $75 million (approximately $62 million USD) for Tranche B Loans, provided by CIBC. It also includes an overdraft facility.
The facility is administered by Canadian Imperial Bank of Commerce (CIBC). The lenders include a syndicate of U.S. banks such as Bank of America, N.A., Comerica Bank, JP Morgan Chase Bank, N.A., Key Bank National Association, Regions Bank, SunTrust Bank, and Wachovia Bank, National Association, in addition to CIBC itself.
The Canadian Credit Facility is scheduled to expire on November 18, 2005. It has provisions for renewal for up to two consecutive 364-day periods, subject to the agreement of all parties involved.