8-KMaterial AgreementsFinancial EventsRegulation FD+1

GLOBAL PAYMENTS INC 8-K Report, Material Agreement (Mar 5, 2014)

Filed March 5, 2014For Securities:GPN

Summary

GLOBAL PAYMENTS INC (GPN) filed an 8-K on March 5, 2014, to disclose significant updates regarding its financing arrangements and a recent acquisition. The company entered into an Amended and Restated Term Loan Agreement and a Revolving Credit Facility Agreement with Bank of America, N.A. These new agreements establish a $1.25 billion five-year term loan and a $1.0 billion revolving credit facility expiring in February 2019. The proceeds from these facilities, along with the repayment of previous debt, will be used to support strategic growth initiatives, including potential acquisitions and ongoing share repurchases. Furthermore, the filing announced the closing of GPN's acquisition of Payment Processing, Inc. on March 4, 2014. This acquisition, combined with the strengthened credit facilities, positions Global Payments Inc. to pursue its expansion strategies and enhance its financial flexibility for future growth opportunities. Investors should monitor how these new credit lines and the recent acquisition contribute to the company's performance and shareholder value.

Key Highlights

  • 1Global Payments Inc. secured a new $1.25 billion five-year senior unsecured term loan facility.
  • 2A senior unsecured $1.0 billion revolving credit facility, expiring in February 2019, was also established.
  • 3These new facilities amend and restate prior credit agreements dating back to 2010 and 2012.
  • 4The company repaid outstanding balances on its previous revolving credit and term loan facilities.
  • 5Proceeds from the new facilities are earmarked for strategic growth initiatives, including acquisitions and share repurchases.
  • 6The company announced the closing of its acquisition of Payment Processing, Inc. on March 4, 2014.
  • 7The agreements include customary financial covenants based on leverage and fixed charge coverage ratios.

Frequently Asked Questions

Global Payments Inc. entered into an Amended and Restated Term Loan Agreement for a $1.25 billion, five-year senior unsecured term loan, and an Amended and Restated Credit Agreement for a $1.0 billion senior unsecured revolving credit facility that expires in February 2019. Both facilities have interest rates based on LIBOR or a base rate, plus a margin dependent on the Company's leverage ratio.

The company intends to use the remaining proceeds from these facilities, after repaying existing debt, to support strategic growth initiatives. This includes funding potential acquisitions and continuing its ongoing share repurchase programs.

In addition to the credit facility updates, Global Payments Inc. announced the closing of its previously reported acquisition of Payment Processing, Inc. on March 4, 2014. This acquisition occurred just prior to the filing date.

Yes, the agreements contain customary affirmative and restrictive covenants. These include financial covenants based on the Company's leverage ratios and fixed charge coverage ratios, as well as standard events of default.