Item 1.01 Conclusion of a Material Definitive Agreement.
Overview of transactions. At
(“CSG”) refinanced its existing term bank debt and revolving credit agreement with a new debt agreement with a consortium of banks. The main advantages of the refinanced arrangement include: (i) an increase in the loan term of
Details of the transaction. At
credit agreement (the “2021 Credit Agreement”) with
The 2021 Credit Agreement provides for loans in the form of: (i) a
five-year aggregate principal term loan (the “2021 Term Loan”); and (ii) a
The interest rates under the 2021 Credit Agreement are based on the CSG’s choice of an adjusted LIBOR rate plus an applicable margin of 1.375% – 2.125%, or another base rate (“ABR”) plus an applicable margin of 0.375% – 1.125%, with the applicable margin, depending on the total guaranteed leverage ratio then net of CSG. CSG will pay a commitment fee of 0.150% to 0.325% of the average daily unused amount of Revolver 2021, with the commitment fee rate also dependent on CSG’s then net secured total leverage ratio. The 2021 credit agreement includes the LIBOR transition language in which CSG can choose an ABR, a Eurodollar rate, an alternative currency forward rate or an alternative currency daily rate.
The 2021 credit agreement includes the mandatory repayments of the total principal amount of the 2021 term loan (payable quarterly) for the first, second, third, fourth and fifth years, the balance of the principal remaining due at maturity. The 2021 Credit Agreement does not provide for any early repayment penalty and requires mandatory repayments in certain circumstances, including: (i) certain proceeds from the sale of assets or damage; and (ii) the proceeds of debt or the issuance of preferred shares.
The 2021 credit agreement contains customary restrictive covenants. In addition, the 2021 Credit Agreement includes customary restrictive clauses which limit the ability of the CSG to: (i) contract additional debt; (ii) create liens on its property; (iii) make investments; (iv) enter into mergers and consolidations; (v) sell assets; (vi) declare dividends or repurchase shares; (vii) carry out certain transactions with affiliated companies; and (viii) prepay certain debts; and (ix) issue the share capital of subsidiaries. The CSG must also comply with certain financial covenants, in particular: (i) a maximum total leverage ratio; (ii) a maximum senior leverage ratio; and (iii) a minimum interest coverage ratio.
As part of the 2021 Credit Agreement, the CSG has entered into a security agreement in favor of
The 2021 credit agreement will be filed with the CSG quarterly report on form 10-Q for the quarter ending
Item 2.03 Creation of a Direct Financial Obligation or Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
The information described above under “Section 1.01”, Entry into a Material Definitive Agreement, is hereby incorporated by reference in this Section 2.03.
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