SUBSEQUENT EVENTS |
9 Months Ended |
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Sep. 30, 2016 | |
| Subsequent Events [Abstract] | |
| SUBSEQUENT EVENTS |
SUBSEQUENT EVENTS
In October 2016, the Company issued $575 million of 4.875% senior notes due 2024 and amended its senior secured credit facility to provide for (i) a new $190 million term loan A facility, (ii) a new $975 million term loan B facility and (iii) a new $365 million revolving credit facility. The proceeds will be used to repay the $1.005 billion principal balance outstanding on the term loan A and term loan B under the existing senior secured credit facility, to repay the entire $425 million principal amount of the Company’s 7% senior notes due 2020 and to pay the related redemption premium of $14.9 million on the senior notes and estimated accrued interest and fees of $38.1 million, leaving approximately $257.0 million for general corporate purposes. The Company expects the loss on extinguishment of debt related to this refinancing to be between $14 million and $17 million. The Company estimates that its cash interest expense will be reduced initially by approximately $2.0 million annually due to the lower interest rate on the 4.875% senior notes due 2024 and the reduction of the interest rate on the term loan B facility from LIBOR plus 2.75% per annum subject to a LIBOR floor of 0.75% to LIBOR plus 2.5% with no LIBOR floor.
Amended Senior Secured Credit Facility
The amended senior secured credit facility provides for (i) a $190 million term loan A facility with a maturity of five years, (ii) a $975 million term loan B facility with a maturity of seven years and (iii) a $365 million revolving credit facility with a maturity of five years. In addition, subject to certain conditions, the Company has the right to increase such facilities by an amount equal to the sum of $625 million and the aggregate principal amount of voluntary prepayments of the term B loans and permanent reductions of the revolving credit facility commitments, in each case, other than from proceeds of long-term indebtedness, and additional amounts so long as the senior secured leverage ratio calculated on a pro-forma basis (as defined in the agreement) is no greater than 3.25x. The revolving credit facility provides for borrowing up to $365 million with sublimits of up to (i) $150 million for the issuance of letters of credit, (ii) $50 million for swingline loans, (iii) $200 million for borrowings in Euros and British Pounds and (iv) $50 million for borrowings in one or more other approved currencies. The amended senior secured credit facility is secured by a first priority lien on substantially all of the tangible and intangible personal property of the Company and the domestic subsidiaries that are guarantors, and by a pledge of substantially all of the shares of stock, partnership interests and limited liability company interests of the Company’s direct and indirect domestic subsidiaries and 65% of each class of capital stock of any first-tier foreign subsidiaries, subject to certain exceptions.
The interest rates per annum applicable to revolving credit facility loans and the term loan A under the amended senior secured credit facility are, at the Company’s option, equal to either LIBOR plus 2.25% or a base rate plus 1.25%, subject to stepdowns based on the Company’s net leverage ratio. The interest rates per annum applicable to the term loan B are, at the Company’s option, equal to either LIBOR plus 2.50% or a base rate plus 1.50%. The Company is required to pay a commitment fee of 0.5% per year on the undrawn portion available under the revolving credit facility, subject to a stepdown based on the Company’s net leverage ratio, and variable fees on outstanding letters of credit.
For the term loan A, the Company is required to make quarterly payments ranging from $2.4 million to $28.5 million with the balance due at maturity in October 2021. For the term loan B, the Company is required to make quarterly payments of $2.4 million with the balance due at maturity in October 2023. The Company is also required to make mandatory prepayments of the loans under the credit agreement, subject to specified exceptions, from excess cash flow and with the proceeds of asset sales, debt issuances and specified other events.
4.875% Senior Notes
The $575 million senior notes due 2024 bear interest at 4.875%, which is payable semi-annually in cash in arrears on May 1 and November 1 of each year beginning on May 1, 2017, and will mature on November 1, 2024. The Company may redeem some or all of the notes, at any time prior to November 1, 2019, at a price equal to 100% of the aggregate principal amount, plus any accrued and unpaid interest to the date of redemption, plus a ‘make-whole’ premium. The Company may redeem up to 35% of the aggregate principal amount of the notes from the proceeds of certain equity offerings prior to November 1, 2019, at a price equal to 104.875% of the aggregate principal amount, plus accrued and unpaid interest thereon, if any, to the date of redemption. In addition, on or after November 1, 2019, the Company may redeem some or all of the notes at any time at the redemption prices specified in the indenture governing the notes, plus any accrued and unpaid interest to the date of redemption. The Company must make an offer to redeem the notes at 101% of their aggregate principal amount, plus accrued and unpaid interest to the repurchase date, if it experiences certain defined changes of control.
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