8-KMaterial AgreementsFinancial EventsOther Events+1

GLOBAL PAYMENTS INC 8-K Report, Material Agreement (Jul 16, 2019)

Filed July 16, 2019For Securities:GPN

Summary

GLOBAL PAYMENTS INC. (GPN) filed an 8-K on July 16, 2019, detailing the closing of new credit facilities to support its pending merger with Total System Services, Inc. (TSYS). The company entered into a $2.0 billion senior unsecured Term Loan Credit Agreement and a $3.0 billion senior unsecured Revolving Credit Agreement, both maturing five years after the merger closing date. These facilities will replace GPN's existing credit agreement and were established in connection with the anticipated TSYS acquisition. The filing indicates that the initial commitments under a previously announced $2.75 billion bridge facility were reduced to approximately $2.1 billion upon the execution of these new agreements. The new facilities offer flexibility in borrowing currencies and interest rate options, including LIBOR-based and prime rate options, with applicable margins tied to the company's credit rating. The agreements include standard covenants and events of default, which are typical for such financing arrangements.

Key Highlights

  • 1Global Payments Inc. entered into new credit facilities, including a $2.0 billion Term Loan and a $3.0 billion Revolving Credit Facility, on July 9, 2019.
  • 2These facilities are a key component of the financing for the pending acquisition of Total System Services, Inc. (TSYS).
  • 3The new credit agreements will replace GPN's existing credit agreement.
  • 4The bridge loan commitments were reduced from $2.75 billion to approximately $2.1 billion following the execution of the new term and revolving credit agreements.
  • 5The facilities provide for borrowings in multiple currencies and offer various interest rate options (LIBOR, LIBOR daily, base rate) plus applicable margins.
  • 6The agreements contain customary affirmative and restrictive covenants, including financial covenants based on leverage and interest coverage ratios.
  • 7The company issued a press release on July 15, 2019, announcing the closing of these new credit facilities.

Frequently Asked Questions

The new credit facilities, consisting of a $2.0 billion Term Loan Credit Agreement and a $3.0 billion Revolving Credit Agreement, were established to finance the acquisition of Total System Services, Inc. (TSYS) and to replace Global Payments Inc.'s existing credit agreement.

Global Payments has secured a $2.0 billion senior unsecured term loan facility and a $3.0 billion senior unsecured revolving credit facility, totaling $5.0 billion in aggregate commitments under these two agreements.

Upon entering into the new Term Loan and Revolving Credit Agreements, the aggregate commitments under the previously announced $2.75 billion bridge facility were reduced to approximately $2.1 billion.

The Term Loan Facility and the Revolving Credit Facility will be available for borrowing on the date the merger with TSYS becomes effective (the Merger Closing Date). Borrowings on the Merger Closing Date related to the Merger will be subject to limited conditionality.