8-KMaterial AgreementsExhibits & Filings

GLOBAL PAYMENTS INC 8-K Report, Material Agreement (Nov 18, 2005)

Filed November 18, 2005For Securities:GPN

Summary

Global Payments Inc. (GPN) filed an 8-K on November 18, 2005, detailing an amendment to its Canadian Credit Facility. The primary focus of this report is the material modification of a definitive agreement concerning the company's debt structure in Canada. This amendment, while extending the facility's termination date by one year to November 17, 2006, also signifies a substantial reduction in Global Payments' aggregate borrowing capacity under this facility. The company has chosen to terminate its Tranche A commitments and significantly decrease its Tranche B commitments, resulting in a drastic reduction from approximately US $147 million to US $42 million in total borrowing potential, excluding an overdraft feature. This strategic decision is driven by a decrease in the company's Canadian borrowing requirements, attributed to changes in its Canadian VISA portfolio processing and altered cash management practices for working capital.

Key Highlights

  • 1Amendment No. 1 to the Amended and Restated Credit Agreement for the Canadian Credit Facility was executed on November 18, 2005.
  • 2The termination date of the Canadian Credit Facility has been extended from November 18, 2005, to November 17, 2006.
  • 3Global Payments has terminated its Tranche A commitments under the Canadian Credit Facility.
  • 4Tranche B commitments have been reduced from Cdn $75 million (approx. US $63 million) to Cdn $50 million (approx. US $42 million).
  • 5The company has permanently reduced its aggregate borrowing capacity under the Canadian Credit Facility from Cdn $175 million (approx. US $147 million) to Cdn $50 million (approx. US $42 million), excluding an overdraft feature.
  • 6The reduction in borrowing capacity is due to decreased Canadian borrowing needs resulting from changes in VISA portfolio processing and cash management strategies.

Frequently Asked Questions

The main event reported is the execution of Amendment No. 1 to Global Payments Inc.'s Amended and Restated Credit Agreement concerning its Canadian Credit Facility. This amendment involves significant changes to the company's borrowing capacity and commitment levels in Canada.

The company has reduced its borrowing capacity due to a decrease in its Canadian borrowing needs. This is primarily attributed to the migration of its Canadian VISA portfolio away from 'same day value' for credit card deposits and the maintenance of surplus cash in Canadian dollar accounts for working capital requirements.

This amendment significantly reduces Global Payments' available credit under its Canadian facility. The total borrowing capacity has decreased from approximately US $147 million to US $42 million, indicating a de-leveraging or reduced reliance on this specific credit line for Canadian operations.

Yes, the amendment extends the termination date of the Canadian Credit Facility by one year, from November 18, 2005, to November 17, 2006.