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Item 1.01.
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Entry into a Material Definitive Agreement.
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Credit Agreements
On April 25, 2018, Comcast Corporation
(“
Comcast
”) entered into (i) a term loan credit agreement among Comcast, the financial institutions party thereto,
Bank of America, N.A., as administrative agent, Wells Fargo Bank, National Association, as syndication agent, and Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Wells Fargo Securities LLC, as joint lead arrangers and joint bookrunners (the “
Term
Loan Credit Agreement
”), and (ii) a 364 day bridge loan credit agreement among Comcast, the financial institutions party
thereto, Bank of America, N.A., as administrative agent, Wells Fargo Bank, National Association, as syndication agent, and Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities LLC as joint lead arrangers and joint bookrunners (the
“
Bridge Loan Credit Agreement
” and, together with the Term Loan Credit Agreement, the “
Credit Agreements
”).
The Credit Agreements were entered into in connection with the all-cash offer for the entire issued and to be issued share capital
of Sky plc (“
Sky
”), described below in Item 8.01, and the proceeds of the loans under both Credit Agreements
are intended to be used for the purposes of financing such transactions.
The Term Loan Credit Agreement provides
for a £7 billion unsecured term loan credit facility (the “
Term Loan Facility
”) to Comcast. The Term Loan
Facility is comprised of (i) a 3-year tranche in the aggregate principal amount of £3 billion, which will mature on the date
that is 3 years after the date of the initial borrowing of the 3-year tranche of the Term Loan Facility and (ii) a 5-year tranche
in the aggregate principal amount of £4 billion, which will mature on the date that is 5 years after the date of the initial
borrowing of the 5-year tranche of the Term Loan Facility. Loans under the Term Loan Credit Agreement may be borrowed in pounds
sterling or U.S. dollars at Comcast’s option. The Bridge Loan Credit Agreement provides for a £16 billion unsecured
bridge loan credit facility (the “
Bridge Loan Facility
”) to Comcast for 364 days after the initial borrowing.
The commitments under the Credit Agreements will remain in effect until the earlier of September 30, 2019 or the date on which
certain termination events customary for U.K. public acquisition financings, including any withdrawal by Comcast of its offer for
Sky, occur. Loans under the 5-year tranche of the Term Loan Facility will amortize at an annual rate of (i) 8.0% during the fourth
year of the Term Loan Facility and (ii) 12.0% during the fifth year of the Term Loan Facility. Amortization payments are not required
for loans under the 3-year tranche of the Term Loan Facility or under the Bridge Loan Facility. The Term Loan Facility and the
Bridge Loan Facility are each guaranteed by Comcast Cable Communications, LLC and NBCUniversal Media, LLC (the “
Guarantors
”).
Subject to receipt of commitments from
new or existing lenders and subject to other customary conditions, Comcast may increase the commitments under the Bridge Loan Facility,
so long as there is no event of default continuing under the Bridge Loan Credit Agreement after giving effect to such increase.
At this time, Comcast has not borrowed any funds under either of the Credit Agreements. Under the Term Loan Facility, interest
is based on either (i) the base rate formula or (ii) the Eurodollar rate formula. Under the Bridge Loan Facility, interest is based
on the Eurodollar rate formula.
The Credit Agreements contain customary
representations and warranties as well as customary affirmative and negative covenants and events of default. Negative covenants
include, among others, limitations on incurrence of liens by Comcast and certain of its subsidiaries and limitations on incurrence
of indebtedness by certain of Comcast’s subsidiaries (other than the Guarantors), and a requirement that the leverage ratio
(as defined in each of the Credit Agreements) as of the end of any fiscal quarter is not greater than 5.75 to 1.00. If any of the
events of default occur and are not cured within applicable grace periods or waived, any unpaid amounts under the Credit Agreements
may be declared immediately due and payable and the commitments may be terminated, but in each case subject to further customary
“certain funds” limitations during the applicable period.
In the ordinary course of their respective
businesses, certain of the lenders and the other parties to the Credit Agreements and their respective affiliates have engaged,
and may in the future engage, in commercial banking, investment banking, financial advisory or other services with Comcast and
its affiliates for which they have in the past and/or may in the future receive customary compensation and expense reimbursement.
The description above is a summary and
is qualified in its entirety by the Term Loan Credit Agreement, which is filed as Exhibit 10.1 to this report and the Bridge Loan
Credit Agreement, which is filed as Exhibit 10.2 to this report and each are incorporated herein by reference.