8-KMaterial AgreementsFinancial EventsExhibits & Filings

GLOBAL PAYMENTS INC 8-K Report, Material Agreement (Nov 17, 2006)

Filed November 17, 2006For Securities:GPN

Summary

Global Payments Inc. (GPN) filed an 8-K report on November 17, 2006, detailing significant updates to its credit facilities. The company has entered into a new, unsecured five-year, $350 million revolving credit facility (U.S. Credit Facility) with a syndicate of banks, including JPMorgan Chase and Wells Fargo Bank. This facility, expiring in November 2011, is intended to fund future strategic acquisitions, provide working capital, and support general corporate purposes. It also includes an accordion feature allowing for an increase up to $700 million. In conjunction with this new U.S. facility, Global Payments terminated its previous U.S. credit facility. Additionally, a wholly-owned subsidiary, Global Payments Direct, Inc., amended its Canadian credit facility. The amended Canadian Credit Facility, with CIBC, is an uncommitted line of credit of CAD $25 million, extendable to CAD $50 million during peak seasons, used for same-day merchant VISA credit card deposits. These actions demonstrate the company's proactive approach to securing financial flexibility for growth and operational needs.

Key Highlights

  • 1Entry into a new, unsecured five-year, $350 million revolving U.S. Credit Facility, expiring November 2011.
  • 2The U.S. Credit Facility can be expanded up to $700 million, providing significant financial flexibility.
  • 3Funds from the U.S. Credit Facility are earmarked for strategic acquisitions, working capital, and general corporate purposes.
  • 4Termination of the prior U.S. credit facility in connection with the new agreement.
  • 5Amendment to the Canadian Credit Facility, increasing its size to CAD $25 million (expandable to CAD $50 million during peak season).
  • 6The Canadian Credit Facility is used to provide same-day value for merchant VISA credit card deposits in Canada.
  • 7The new credit facilities include customary financial and non-financial covenants and events of default.

Frequently Asked Questions

The new $350 million unsecured five-year revolving U.S. Credit Facility is primarily intended to fund future strategic acquisitions, provide a source of working capital, and support general corporate purposes for Global Payments Inc.

The initial U.S. Credit Facility is for $350 million, but it includes an accordion feature that allows the Company to expand the facility size to $700 million by requesting additional commitments from lenders.

The company terminated its former U.S. credit facility, which was set to expire on November 25, 2006, in conjunction with entering into the new U.S. Credit Facility.

The amended Canadian Credit Facility, with an initial size of CAD $25 million (expandable to CAD $50 million seasonally), allows Global Payments Direct, Inc. to continue providing certain Canadian merchants with same-day value for their VISA credit card deposits, supporting Canadian operations.