Item 1.01. Entry into a Material Definitive Agreement.
General
On December 1, 2022 (the "Closing Date"), EVERTEC, Inc., ("EVERTEC" or the
"Company") and EVERTEC Group, LLC, ("EVERTEC Group" or "Borrower"), a wholly
owned indirect subsidiary of EVERTEC, entered into a credit agreement (the
"Credit Agreement") with a syndicate of lenders and Truist Bank ("Truist"), as
administrative agent and collateral agent, providing for (i) a $415.0 million
term loan A facility (the "Term Loan Facility") and (ii) a $200.0 million
revolving credit facility (the "Revolving Facility", and together with the Term
Loan Facility, the "2022 Credit Facilities"). The 2022 Credit Facilities mature
on December 1, 2027 (the "Maturity Date"). Proceeds from the Term Loan Facility
and drawn from the Revolving Facility on the Closing Date were used to refinance
the Borrower's existing credit facilities, which were terminated on the Closing
Date, and for the payment of fees and expenses payable in connection with the
Transactions. Proceeds from the Revolving Credit Facility drawn from time to
time after the Closing Date will be used for general corporate purposes.
Capitalized terms used but not otherwise defined herein have the meanings
ascribed to such terms in the Credit Agreement.
Scheduled Amortization Payments
The Term Loan Facility amortizes in equal quarterly installments at a rate per
annum equal to, initially, 5% of the principal amount and, for any installment
payments to be made in the calendar year ending 2027, 7.5% of the principal
amount, with the balance payable on the Maturity Date. The Revolving Credit
Facility terminates on the Maturity Date, and loans thereunder may be borrowed,
repaid and reborrowed prior thereto.
Voluntary Prepayments and Reduction and Termination of Commitments
EVERTEC Group may prepay loans under the Term Loan Facility and permanently
reduce the loan commitments under the Revolving Facility at any time without
premium or penalty, subject to compensation for any break funding costs incurred
by a lender and timely submission of a notice of prepayment or commitment
reduction, as applicable. EVERTEC Group is required to make certain mandatory
prepayments of the 2022 Credit Facilities in certain circumstances.
Interest
The interest rates under the 2022 Credit Facilities are based on, at EVERTEC
Group's option, with respect to the Term Loan Facility and borrowings under the
Revolving Credit Facility that are denominated in Dollars, (a) the Adjusted Term
SOFR for the Interest Period in effect for such borrowing plus an applicable
margin of 1.50% per annum, which applicable margin is subject to four 25 bps
step-ups (i.e. 1.75%, 2.00%, 2.25% and 2.50% per annum, respectively) based upon
the Company's total net leverage ratio or (b) the ABR plus an applicable margin
of 0.50% per annum, which applicable margin is subject to four 25 bps step-ups
(i.e. 0.75%, 1.00%, 1.25% and 1.50% per annum, respectively) based upon the
Company's total net leverage ratio. Borrowings under the Revolving Credit
Facility that are denominated in a currency other than Dollars will bear
interest at the Alternative Currency Rate for the Interest Period in effect for
such borrowing plus an applicable margin of 1.50% per annum, which applicable
margin is subject to four 25 bps step-ups (i.e. 1.75%, 2.00%, 2.25% and 2.50%
per annum, respectively) based upon the Company's total net leverage ratio.
Guarantees and Collateral
The 2022 Credit Facilities are secured by substantially all assets of EVERTEC
and its existing and future material subsidiaries (including EVERTEC Group),
subject to customary exceptions. EVERTEC and each of EVERTEC's existing and
future material wholly-owned subsidiaries (including EVERTEC Group with respect
to the obligations of EVERTEC and its existing and future material wholly-owned
subsidiaries(other than EVERTEC Group), subject to certain customary exceptions,
guarantee repayment of the 2022 Credit Facilities.
In connection with the Credit Agreement, on December 1, 2022, EVERTEC, EVERTEC
Group and the subsidiary guarantors party thereto, entered into a Guarantee
Agreement (the "Guarantee Agreement"), pursuant to which EVERTEC Group's
obligations under the 2022 Credit Facilities and under any cash management,
interest rate protection or other hedging arrangements entered into with a
lender or any affiliate thereof are guaranteed by EVERTEC and each of EVERTEC's
existing wholly-owned subsidiaries (other than EVERTEC Group) and subsequently
acquired or organized subsidiaries, subject to certain exceptions.
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In addition, on December 1, 2022, EVERTEC, EVERTEC Group and the subsidiaries
party thereto, entered into a Collateral Agreement (the "Collateral Agreement"),
pursuant to which, subject to certain exceptions, the 2022 Credit Facilities are
secured, to the extent legally permissible, by substantially all of the assets
of (1) EVERTEC, including a perfected pledge of all of the limited liability
company interests of EVERTEC Intermediate Holdings, LLC ("Holdings"), (2)
Holdings, including a perfected pledge of all of the limited liability company
interests of EVERTEC Group and (3) EVERTEC Group and the subsidiary guarantors,
including but not limited to: (a) a pledge of substantially all capital stock
held by EVERTEC Group or any guarantor and (b) a perfected security interest in
substantially all tangible and intangible assets of EVERTEC Group and each
guarantor.
Covenants
The 2022 Credit Facilities are subject to customary affirmative and negative
covenants. The negative covenants in the 2022 Credit Facilities include, among
other things, limitations (subject to exceptions) on the ability of EVERTEC and
its restricted subsidiaries to:
• declare dividends and make other distributions;
. . .
Item 1.02. Termination of a Material Definitive Agreement.
On December 1, 2022, the net proceeds received by EVERTEC Group from the 2022
Credit Facilities were used, among other things, to terminate EVERTEC Group's
previous secured credit facilities, under the credit agreement, dated as of
November 27, 2018, among EVERTEC Intermediate Holdings, LLC, EVERTEC Group, Bank
of America, N.A., as administrative agent, collateral agent, swingline lender
and L/C issuer, and the lenders party thereto.
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Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
To the extent required, the information included in Item 1.01 of this Current
Report on Form 8-K is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On December 2, 2022, EVERTEC issued a press release announcing the entry into
the Credit Agreement. A copy of the press release is attached hereto as Exhibit
99.1 and incorporated herein by reference.
The information contained in this Item 7.01 shall not be deemed "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or otherwise subject to the liabilities of that section, nor
shall it be deemed incorporated by reference in any filing under the Securities
Act of 1933, as amended, or the Exchange Act except as expressly set forth by
specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
10.1* Credit Agreement, dated as of December 1, 2022, among EVERTEC, Inc.,
EVERTEC Group, LLC, the lenders and L/C issuers party thereto from
time to time, and Truist Bank, as administrative agent, collateral
agent, swingline lender and an L/C issuer
10.2 Collateral Agreement, dated as of December 1, 2022, among EVERTEC,
Inc., EVERTEC Group, LLC, each subsidiary loan party identified
therein and Bank of America, N.A., as collateral agent.
10.3 Guarantee Agreement, dated as of December 1, 2022, by and among
EVERTEC, Inc., EVERTEC Group, LLC, the loan parties identified on the
signature pages thereof and Truist Bank, as administrative agent and
collateral agent
99.1 Press Release re: Credit Agreement dated December 2, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
*Certain exhibits and schedules have been omitted pursuant to Item 601(a)(5) of
Regulation S-K. A copy of any omitted schedule or exhibit will be furnished to
the SEC upon request.
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