Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
UPC Broadband Holding B.V. (“UPC Broadband”) and UPC Financing Partnership (“UPC Financing”) entered into the financing described below by way of additional facilities drawn under the credit agreement originally dated January 16, 2004, as amended from time to time (the “Credit Agreement”). UPC Broadband and UPC Financing are direct wholly-owned subsidiaries of UPC Holding B.V. and UPC Holding B.V. is an indirect wholly-owned subsidiary of Liberty Global plc.
On August 20, 2020, UPC Financing and The Bank of Nova Scotia as facility agent, among others, entered into a $1,300.0 million additional facility accession agreement (the “Additional Facility AV Accession Agreement”) pursuant to the Credit Agreement. Under the terms of the Additional Facility AV Accession Agreement, certain lenders have agreed to provide a $1,300.0 million term loan facility (“Facility AV”) to UPC Financing, which amount is to be issued at 99.00% of par. The final maturity date for Facility AV will be January 31, 2029. Facility AV will bear interest at a rate of LIBOR plus 3.50% per annum subject to a LIBOR floor of 0%.
On August 20, 2020, UPC Broadband and The Bank of Nova Scotia as facility agent, among others, entered into a €400.0 million ($474.4 million at the August 20, 2020 exchange rate) additional facility accession agreement (the “Additional Facility AW Accession Agreement”) pursuant to the Credit Agreement. Under the terms of the Additional Facility AW Accession Agreement, certain lenders have agreed to provide a €400.0 million term loan facility (“Facility AW”, and together with Facility AV, the “Facilities”) to UPC Broadband, which amount is to be issued at 98.50% of par. The final maturity date for Facility AW will be January 31, 2029. Facility AW will bear interest at a rate of EURIBOR plus 3.50% per annum subject to a EURIBOR floor of 0%.
The Facilities can be utilized by UPC Financing or UPC Broadband (as applicable) for general corporate purposes and/or working capital purposes, including without limitation, the funding of the Acquisition (as defined below), the redemption, refinancing, repayment or prepayment of any existing indebtedness of the Borrower Group (as defined in the Credit Agreement) and/or the payment of any fees and expenses in connection with the Facilities and the other transactions related thereto.
The proceeds from the Facilities will be made available to UPC Schweiz GmbH or another wholly-owned subsidiary of UPC Broadband for the acquisition of all of the publicaly owned shares in Sunrise Communications Group AG (being a Swiss corporation (Aktiengesellschaft) with its registered office in Glattpark (Opfikon), Switzerland) which is listed on the SIX Swiss Exchange (the “Acquisition”).
The Additional Facility AV Accession Agreement and the Additional Facility AW Accession Agreement provide that the lenders under Facility AV and Facility AW (as applicable) consent to the amendments to the covenants and other provisions of the Credit Agreement and the Finance Documents (as defined in the Credit Agreement) outlined in the Additional Facility AV Accession Agreement and the Additional Facility AW Accession Agreement (as applicable) (including in the schedules thereto). Once the consent of the requisite lenders is obtained under the Credit Agreement, such amendments may be implemented at the election of UPC Broadband.
The foregoing descriptions of Facility AV and Facility AW and the transactions contemplated thereby are not complete and are subject to and qualified in their entirety by reference to the Additional Facility AV Accession Agreement, a copy of which is attached hereto as Exhibit 4.1, and the Additional Facility AW Accession Agreement, a copy of which is attached hereto as Exhibit 4.2.