Item 1.01 Entry into a Material Definitive Agreement
Amendment to Fourth Amended and Restated Credit Agreement
On January 2, 2018 (the Closing Date), Virtu Financial LLC (Virtu Financial), a subsidiary of Virtu Financial, Inc. (the Company) and VFH Parent LLC (the Borrower) a subsidiary of Virtu Financial, entered into an amendment (the Amendment) to its Fourth Amended and Restated Credit Agreement (the Amended Credit Agreement), with the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent.
Pursuant to the Amendment, and following the prepayments made by the Borrower as further described in Item 8.01, the aggregate principal amount of the term loan under the Amended Credit Agreement will be $624 million.
The term loan borrowings under the Amended Credit Agreement will bear interest, at our election, at either (i) the greatest of (a) the prime rate in effect, (b) the federal funds effective rate plus 0.5%, (c) an adjusted LIBOR rate for a Eurodollar borrowing with an interest period of one month plus 1% and (d) 2.00% plus, in each case, 2.25%, or (ii) the greater of (x) an adjusted LIBOR rate for the interest period in effect and (y) 1.00%, plus, in each case, 3.25%. Prior to the Amended Credit Agreement, the Borrowers term loan borrowings bore interest, at our election, at either (i) the greatest of (a) the prime rate in effect, (b) the federal funds effective rate plus 0.5%, (c) an adjusted LIBOR rate for a Eurodollar borrowing with an interest period of one month plus 1% and (d) 2.00% plus, in each case, 2.75% or (ii) the greater of (x) an adjusted LIBOR rate for the interest period in effect and (y) 1.00%, plus, in each case 3.75%.
The senior secured credit facility under the Amended Credit Agreement is subject to certain financial covenants, which require the Borrower to maintain specified financial ratios and tests, including interest coverage and total leverage ratios, which may require the Borrower to take action to reduce its debt or to tact in a manner contrary to its business objectives. The senior secured credit facility is also subject to certain negative covenants that restrict the Borrowers ability to, among other things, incur additional indebtedness, dispose of assets, guarantee debt obligations, repay other indebtedness, pay dividends, pledge assets, make investments, including in certain of our operating subsidiaries, make acquisitions or consummate mergers or consolidations and engage in certain transactions with subsidiaries and affiliates. The Borrower is also subject to contingent principal payments based on excess cash flow and certain other triggering events.
Borrowings under the Amended Credit Agreement are secured by substantially all of the Borrowers assets, other than the equity interests in and assets of its subsidiaries that are subject to, or potentially subject to, regulatory oversight and its foreign subsidiaries, but including 100% of the non-voting stock and 65% of the voting stock of these subsidiaries.
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