Summary
Take-Two Interactive Software, Inc. (TTWO) filed an 8-K on November 20, 2007, detailing a significant amendment and restatement of its credit agreement, effective November 16, 2007. This amendment, entered into with Wells Fargo Foothill, Inc., substantially increases the company's revolving credit facility from $100 million to $140 million. The increased credit line aims to support working capital, capital expenditures, and general corporate needs, providing TTWO with enhanced financial flexibility. The agreement also includes specific terms for a UK subfacility and outlines covenants, events of default, and interest coverage ratio requirements, demonstrating a more robust financial structure. This development is a positive signal for investors regarding the company's ability to fund its operations and growth initiatives. The new credit facility matures on July 3, 2012, and is secured by substantially all of the borrower's and its domestic subsidiaries' assets. The terms include variable interest rates tied to base rate or LIBOR, with margins dependent on liquidity levels. The agreement also imposes limitations on various corporate actions such as incurring additional debt, asset disposals, mergers, and dividend payments, reflecting standard banking covenants designed to protect the lenders while ensuring the company maintains operational stability. Investors should note the specific conditions and covenants that the company must adhere to moving forward.
Key Highlights
- 1Take-Two Interactive Software, Inc. has amended and restated its credit agreement, increasing the revolving credit facility by $40 million to a total of $140 million.
- 2The new credit facility matures on July 3, 2012.
- 3The increased credit line is intended to fund working capital requirements, capital expenditures, and other general corporate expenditures.
- 4The credit facility is secured by substantially all assets of the borrower and its domestic subsidiaries, with a UK subfacility also available.
- 5Interest rates are variable, based on either a base rate or LIBOR, with margins subject to the company's liquidity levels.
- 6The agreement includes standard covenants limiting debt, asset disposals, mergers, and dividend payments, as well as specifying events of default.
- 7A new requirement for an interest coverage ratio will be effective from January 31, 2008, if liquidity falls below $30 million.