Western Union Co.on April 11 entered into a term loan agreement providing for an unsecured term loanfacility in an aggregate amount of $575 million, according to a Form 8-K filed April13.
The agreement provides for an unsecured delayed draw term loanfacility, which permits Western Union to draw term loans from time to time untilOct. 11. In addition, Western Union has the option to increase the commitments underthe agreement, either before or after the commitment termination date, in an aggregateamount up to $250 million. Any such increases would be subject to obtaining additionalcommitments from existing or new banks under the agreement. To the extent any suchincreased commitments are obtained after the commitment termination date, they mustbe funded in full at the time of the new commitment.
The proceeds of the term loans may be used by Western Union toprovide for the working capital and general corporate requirements of Western Unionand its subsidiaries, including to redeem, repay, purchase or refinance WesternUnion's issued and outstanding 5.930% notes due in October, and to pay any feesand expenses in connection with the agreement and other related loan documents,provided that no more than $450 million in proceeds from the loans under the agreementmay be used for purposes other than redeeming, repaying, purchasing or refinancingthe 5.930% notes and paying any fees and expenses in connection with the agreementand other related loan documents.
Interest due under the agreement is fixed for the term of eachborrowing and is payable according to the terms of that borrowing. Generally, interestis calculated using a selected LIBOR rate plus an interest rate margin of 150 basispoints. A commitment fee on the unused amount of the commitments under the facilityis also payable quarterly until the commitment termination date. In addition tothe payment of interest, Western Union is required to make certain periodic amortizationpayments with respect to the outstanding principal of the term loans commencingafter the second anniversary of the closing of the agreement. The final maturitydate of the agreement is April 11, 2021.
Western Union entered the agreement with a syndicate of lendersincluding Bank of America NA, Mizuho Bank (USA) and U.S. Bank NA, in their respectivecapacities as lenders; Mizuho Bank (USA) and U.S. Bank as syndication agents; CitizensBank NA, Fifth Third Bank, State Bank of India, New York and Barclays Bank PLC asdocumentation agents; and Bank of America as administrative agent for the participatingbanks.