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.