Item 1.01 Entry into a Material Definitive Agreement
On April 10, 2019, ATN International, Inc. (the Company) entered into a Third Amendment and Confirmation Agreement (the Amendment), among the Company, as Borrower, certain of the Companys subsidiaries, as Guarantors, CoBank, ACB, as Administrative Agent (the Agent), and the other Lenders named therein, to the Fourth Amended and Restated Credit Agreement, dated as of December 19, 2014, among the Company, certain of the Companys subsidiaries, as Guarantors, the Agent and the other Lenders named therein (as amended by the Amendment and otherwise amended, modified, supplemented, extended or restated from time to time, the Credit Agreement).
Amount.
The Credit Agreement provides for a $200 million revolving credit facility (the Credit Facility). The Company may use (i) up to $75 million under the Credit Facility for standby or trade letters of credit and (ii) up to $10 million under a swingline sub-facility. Upon the closing of the Credit Facility, approximately $8.0 million of letters of credit were issued, outstanding and undrawn.
Maturity.
The Credit Facility matures on April 10, 2024 unless accelerated pursuant to an event of default, as described below. All amounts outstanding under the Credit Facility will be due and payable upon the earlier of the maturity date or the acceleration of the loans and commitments upon an event of default.
Interest Rate.
Amounts borrowed under the Credit Facility bear interest at a rate equal to, at the Companys option, either (i) the London Interbank Offered Rate (LIBOR) plus an applicable margin ranging between 1.25% to 2.25% or (ii) a base rate plus an applicable margin ranging from 0.25% to 1.25%. Swingline loans will bear interest at the base rate plus the applicable margin for base rate loans. The base rate is equal to the higher of (i) 1.00% plus the higher of (x) the LIBOR Rate (as defined in the Credit Agreement) for an interest period of one month and (y) the LIBOR Rate for an interest period of one week; (ii) the Federal Funds Effective Rate (as defined in the Credit Agreement) plus 0.50% per annum; and (iii) the Prime Rate (as defined in the Credit Agreement). The applicable margin is determined based on the Companys Total Net Leverage Ratio (as defined in the Credit Agreement). Under the terms of the Credit Agreement, the Company must also pay a fee ranging from 0.150% to 0.375% of the average daily unused portion of the Credit Facility over each calendar quarter.
Security; Guarantors.
Certain of the Companys subsidiaries are guarantors of the Companys obligations under the Credit Agreement. Further, the Companys obligations are secured by (i) a first priority, perfected lien on substantially all the property and assets of the Company and the guarantor subsidiaries, including its principal wholly-owned domestic operating subsidiaries, and (ii) a pledge of 100% of the Companys equity interests in certain domestic subsidiaries and up to 65% of the equity interests outstanding of certain foreign subsidiaries, in each case, including the Companys principal operating subsidiaries. Subject to the terms and conditions of the Credit Agreement, the Company may designate subsidiaries as unrestricted subsidiaries that shall not constitute guarantors or be subject to the representations and warranties, covenants or events of default contained in the Credit Agreement.
Financial Covenant; Representations and Warranties; Other Provisions.
The Credit Agreement requires the Company to maintain a Total Net Leverage Ratio of no greater than 2.75:1.00; provided that, upon the occurrence of a Qualifying Acquisition (as defined in the Credit Agreement), the Company
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is required to maintain a Total Net Leverage Ratio of no greater than to 3.25:1.00 during the fiscal quarter in which such Qualifying Acquisition occurred and for the following three fiscal quarters. The Credit Agreement contains customary representations, warranties and covenants, including covenants by the Company limiting additional indebtedness, liens, guaranties, distributions, mergers and consolidations, substantial asset sales, investments and loans, sale and leasebacks, transactions with affiliates and fundamental changes.
Default Provisions.
The Credit Agreement provides for events of default customary for credit facilities of this type, including but not limited to nonpayment, defaults on other debt, misrepresentation, breach of covenants, representations and warranties, insolvency and bankruptcy. After the occurrence of a bankruptcy or receivership-related event of default and for so long as it continues, the interest rate then in effect on all outstanding obligations automatically increases by 2.0%. After the occurrence of a payment or insolvency-related event of default, the Agent or Requisite Lenders (as defined in the Credit Agreement) may increase the interest rate then in effect on all outstanding obligations by 2.0%. After the occurrence of any other event of default and for so long as it continues, the Requisite Lenders may increase the interest rate then in effect on all outstanding obligations by 2.0%. Upon an event of default relating to bankruptcy or receivership, the amounts outstanding under the Credit Agreement will become immediately due and payable and the lender commitments will be automatically terminated. Upon the occurrence and continuation of any other event of default, the Administrative Agent and/or the Requisite Lenders may accelerate payment of all obligations and terminate the lenders commitments under the Credit Agreement.
The foregoing description is only a summary of the provisions of the Amendment and is qualified in its entirety by the terms of the Amendment, a copy of which is filed herewith as Exhibit 10.1 and incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 regarding the Companys entry into the Amendment is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
10.1
Third Amendment and Confirmation Agreement dated as of April 10, 2019 by and among the Company, as Borrower, CoBank, ACB, as Administrative Agent, the Guarantors named therein and the other Lenders named therein.
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