CSG SYSTEMS INTERNATIONAL INC: Conclusion of a material definitive agreement, creation of a direct financial obligation or an obligation under an off-balance sheet arrangement of a registrant (form 8-K)

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Item 1.01 Conclusion of a Material Definitive Agreement.

Overview of transactions. At September 13, 2021, CSG Systems International, Inc.
(“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
March 2023 To September 2026; (ii) a reduction in the interest rate and other charges; (iii) the extension of the revolving credit facility of $ 200 million To $ 450 million; and (iv) financial and other covenants that are generally equivalent to those in the existing agreement. The new debt agreement increased CSG’s liquidity and capital position by approximately $ 30 million.

Details of the transaction. At September 13, 2021, CSG has entered into a new $ 600 million
credit agreement (the “2021 Credit Agreement”) with BofA Securities, Inc. and
Wells Fargo Securities, LLC, as Joint Lead Arrangers and Joint Bookrunners;
Wells Fargo Bank, National Association, as a syndication agent; BBVA, United States and National Association of American Banks, as co-documentation agents; and Bank of America, NA., as administrative agent, guarantee agent, Swingline lender and Issuing bank. The 2021 credit agreement replaced the credit agreement that the CSG had concluded in March 2018 (the “2018 Credit Agreement”).

The 2021 Credit Agreement provides for loans in the form of: (i) a $ 150 million
five-year aggregate principal term loan (the “2021 Term Loan”); and (ii) a $ 450 million five-year revolving credit facility (the “Revolver 2021”). With the $ 150 million proceeds from the 2021 Term Loan, the CSG reimbursed the outstanding $ 120 million term loan balance under the 2018 credit agreement, resulting in a net increase in available cash of $ 30 million, part of which has been used to pay certain fees and expenses related to refinancing, and the remainder of which will be used for general business purposes.

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 Bank of America NA, as a guarantee agent (the “Guarantee Agreement”). Under the Guarantee Agreement and the 2021 Credit Agreement, some of CSG’s domestic subsidiaries have guaranteed its obligations, and CSG and these subsidiaries have pledged substantially all of their assets to secure the obligations under the credit agreement. 2021 and these guarantees.

The 2021 credit agreement will be filed with the CSG quarterly report on form 10-Q for the quarter ending September 30, 2021.

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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