Entry into a Material Definitive Agreement
On May 24,
2019, World Wrestling Entertainment, Inc. (the “Company”) and certain of its domestic subsidiaries (collectively, the “Loan Parties”) entered into an amended and restated $200 million senior unsecured revolving credit facility with a syndicated group of banks, with JPMorgan Chase Bank, N.A. acting as administrative agent (the “Amended and Restated Credit Agreement”). The Amended and Restated Credit Agreement replaces the previous $100 million revolving credit facility. The Amended and Restated Credit Agreement, among other things, (a) increases the aggregate amount available to the Company from $100 million to $200 million, (b) extends the revolving maturity date from July 29, 2021,
to May 24, 2024
increases the uncommitted accordion feature from $50 million to $100 million
increases the basket for permitted liens from $5 million to $35 million, (e) provides the Company with greater flexibility to make investments and capital expenditures, (f) excludes the Company’s new corporate headquarters lease from the leverage and interest coverage ratios and
) amends the applicable commitment fee rate to be generally more favorable for the Company.
Under the Amended and Restated Credit Agreement, the Company is permitted to borrow from time to time amounts of up to an aggregate of $200 million, with up to $30 million being available for letters of credit. The Amended and Restated Credit Agreement is unsecured and is guaranteed by certain domestic subsidiaries of the Company. The interest rate for borrowings under the Amended and Restated Credit Agreement will be, at the Company’s election, either (a) an alternate base rate equal to the higher of (1) the prime rate in effect on such day, (2) the federal funds effective rate or overnight bank funding rate (whichever is higher) plus 0.5% and (3) the Eurodollar rate applicable for a one-month interest period plus 1.0% (collectively, the “ABR Rate”), plus an applicable margin described below, or (b) an adjusted Eurodollar rate, plus an applicable margin
ranging from (x) 0.00% to 0.75% with respect to loans as to which the ABR Rate election is in effect, or (y) 1.00% to 1.75% with respect to loans as to which the Eurodollar rate election is in effect, in each case with the effective margin determined
based on the Company’s leverage ratio
as defined in the Amended and Restated Credit Agreement
. In addition, the Company will be required to pay a commitment fee based on the applicable leverage ratio
ranging from 0.15% to 0.25%.
Letters of credit issued under the Amended and Restated Credit Agreement will be assessed a fee based upon the applicable margin charged for Eurodollar rate loans. In addition, the Company will pay the issuing banks a fronting fee of 0.125% per year on the undrawn and unexpired amount of each issued letter of credit.
The Amended and Restated Credit Agreement contains certain representations and warranties, affirmative and negative covenants and events of default customary for credit facilities of this type, including limitations on the Company and its subsidiaries with respect to indebtedness, liens, mergers and acquisitions, dispositions of assets, investments, capital expenditures, and transactions with affiliates. The Company is permitted to pay dividends in an unlimited amount so long as no default or event of default has occurred and is continuing and after giving pro forma effect to the making of such dividends and the Company is in pro forma compliance with its financial covenants.
The foregoing description of the Amended and Restated Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the Amended and Restated Credit Agreement, which is filed as Exhibit 10.18 to this Current Report on Form 8-K and incorporated herein by reference.
Certain of the lenders under the Amended and Restated Credit Agreement, or their affiliates, have provided, and may in the future provide, commercial or investment banking, trust, advisory and other financial services in the ordinary course of business for customary fees.