8-KMaterial AgreementsFinancial EventsExhibits & Filings

TAKE TWO INTERACTIVE SOFTWARE INC 8-K Report, Material Agreement (Oct 17, 2011)

Filed October 17, 2011For Securities:TTWO

Summary

Take-Two Interactive Software, Inc. (TTWO) filed an 8-K on October 17, 2011, to report the entry into a Second Amended and Restated Credit Agreement. This agreement significantly impacts the company's financial flexibility and operational capacity by extending its revolving credit facility. The amendment and restatement of the existing credit agreement with Wells Fargo Capital Finance, Inc. provides the company with a $100 million credit line that can be increased up to $140 million. This facility is set to mature on October 17, 2016, offering a stable financing runway for the company. The new credit agreement includes provisions for letters of credit and a specific subfacility for its U.K. subsidiary, demonstrating a structured approach to managing international operations. The borrowing base is tied to eligible accounts and inventory, a common practice for companies in this industry. The agreement also outlines covenants, limitations on certain corporate actions like asset disposals and acquisitions, and events of default, all of which are crucial for investors to understand the company's operational constraints and risk management framework.

Key Highlights

  • 1Take-Two Interactive entered into a Second Amended and Restated Credit Agreement on October 17, 2011.
  • 2The agreement extends the revolving credit facility to $100 million, with an option to increase it to $140 million.
  • 3The maturity date for the credit facility is extended to October 17, 2016.
  • 4The credit facility includes a $25 million subfacility for letters of credit.
  • 5A separate U.K. subfacility of up to $25 million is available for Take-Two GB Limited.
  • 6Borrowings are secured by substantially all assets of the Company and its domestic subsidiaries, with guarantees from domestic subsidiaries and specific U.K./Swiss subsidiaries.
  • 7The agreement imposes covenants and limitations on various corporate actions, including indebtedness, asset disposals, acquisitions, and dividend payments.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce Take-Two Interactive Software, Inc.'s entry into a Second Amended and Restated Credit Agreement with Wells Fargo Capital Finance, Inc. This agreement modifies and extends the company's existing credit facility.

The new credit agreement establishes a revolving credit facility of $100 million, which can be increased to $140 million, maturing on October 17, 2016. It includes subfacilities for letters of credit and U.K. operations, and its terms are tied to eligible accounts and inventory. The agreement also contains covenants and restrictions on various company actions.

The extended maturity date and the potential increase in the credit facility provide Take-Two Interactive with enhanced financial flexibility and a stable source of capital for its operations and strategic initiatives over the next five years. However, investors should also consider the covenants and restrictions imposed by the agreement, which may limit certain corporate actions.

The borrowings under the U.S. portion of the Credit Agreement are secured by liens on substantially all of the assets of the Company and its domestic subsidiaries. Similar security is provided by U.K. and Swiss subsidiaries for the U.K. Subfacility.