Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
On October 15, 2020, GCI, LLC (the "Borrower"), a wholly owned subsidiary of GCI
Liberty, Inc. ("GCI Liberty"), entered into an Amendment Agreement among the
Borrower, the subsidiary guarantors party thereto, Ventures Holdco, LLC, the
lenders party thereto, Credit Agricole Corporate and Investment Bank, as
administrative agent, and the other parties thereto (the "Amendment Agreement").
The Amendment Agreement amended and restated the Sixth Amended and Restated
Credit Agreement of the Borrower dated as of December 27, 2018, to, among other
things, (i) extend the maturity date of the borrowings and commitments under the
revolving credit facility and the Term Loan B and (ii) increase the aggregate
principal amount of the Term Loan B (the "Amended Credit Facilities").
The Amended Credit Facilities include a $550 million revolving credit facility,
with a $25 million sub-limit for standby letters of credit, and a $400 million
Term Loan B. The borrowings under the Amended Credit Facilities bear interest at
either the alternate base rate or LIBOR (based on an interest period selected by
the Borrower of one month, two months, three months or six months) at the
Borrower's election in each case plus a margin. The revolving credit facility
borrowings that are alternate base rate loans bear interest at a per annum rate
equal to the alternate base rate plus a margin that varies between 0.50% and
1.75% depending on the Borrower's total leverage ratio. The revolving credit
facility borrowings that are LIBOR loans bear interest at a per annum rate equal
to the applicable LIBOR plus a margin that varies between 1.50% and 2.75%
depending on the Borrower's total leverage ratio. Term Loan B borrowings that
are alternate base rate loans bear interest at a per annum rate equal to the
alternate base rate plus a margin of 1.75%. Term Loan B borrowings that are
LIBOR loans bear interest at a per annum rate equal to the applicable LIBOR plus
a margin of 2.75%.
The borrowings under the revolving credit facility and the Term Loan B are
scheduled to mature on October 15, 2025; provided that, if the Term Loan B is
not refinanced or repaid in full prior to April 15, 2025, then the borrowings
under the revolving credit facility will mature on April 15, 2025. Principal
payments are due quarterly on the Term Loan B equal to 0.25% of the original
principal amount. The loans are subject to customary mandatory prepayment
provisions. Each loan may be prepaid at any time and from time to time without
penalty other than customary breakage costs and, in the case of the Term Loan B,
subject to a customary six month "soft call." Any amounts prepaid on the
revolving credit facility may be reborrowed.
The payment and performance of the Borrower's obligations under the Amended
Credit Facilities are guaranteed by the each of the Borrower's subsidiaries,
other than certain excluded subsidiaries, and are secured by security interests
on substantially all of the assets of the Borrower and the subsidiary guarantors
and a pledge of the equity interests in each subsidiary guarantor.
The Amended Credit Facilities contain certain affirmative and negative
covenants, including certain restrictions on the Borrower and its subsidiaries
with respect to, among other things: incurring additional indebtedness; creating
liens on property or assets; making certain loans or investments; selling or
disposing of assets or equity of subsidiaries; paying certain dividends and
other restricted payments; dissolving, consolidating or merging; entering into
certain transactions with affiliates; entering into sale or leaseback
transactions; restricting subsidiary distributions; acquiring businesses;
prepaying certain indebtedness; amending certain material agreements; entering
into hedging arrangements; and the Borrower's first lien leverage ratio.
In addition, upon the consummation of the acquisition of GCI Liberty by Liberty
Broadband Corporation ("Liberty Broadband") pursuant to the terms of the
previously announced merger agreement under which Liberty Broadband has agreed
to acquire GCI Liberty in a stock-for-stock merger, the covenant that generally
requires that the fair market value of the consolidated net assets of the
Liberty Subsidiaries (as defined in the Amended Credit Facilities) equal at
least $3.0 billion at the time of, among other things, certain activities of
Liberty Subsidiaries, including but not limited to, incurrence of indebtedness,
restricted payments, asset sales and incurrence of liens by any Liberty
Subsidiary, will cease to be in effect.
Borrowings under the revolving credit facility and the Term Loan B were used at
closing, along with cash on hand, to redeem all $325 million aggregate
outstanding principal amount of the Borrower's 6.625% Senior Notes due
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2024, and to pay related expenses. Future borrowings under the revolving credit
facility may be used for general corporate purposes.
The foregoing description of the Amended Credit Facilities is qualified in its
entirety by reference to the Amendment Agreement, which will be filed as an
exhibit to GCI Liberty's Annual Report on Form 10-K for the year ended December
31, 2020.
Forward-Looking Statements
This Current Report on Form 8-K includes forward-looking statements. All
statements other than statements of historical fact are "forward-looking
statements" for purposes of federal and state securities laws. Words such as
"will" or the negative of such terms or other variations thereof and words and
terms of similar substance used in connection with any discussion of future
plans, actions, or events identify forward-looking statements. Similarly,
statements herein that describe the Combination, including the consummation of
the Combination and its impact on the covenant requiring a minimum fair market
value of the Liberty Subsidiaries' consolidated net assets, and other statements
that are not historical facts are also forward-looking statements. It is
uncertain whether any of the events anticipated by the forward-looking
statements will transpire or occur. These forward-looking statements involve
certain risks and uncertainties, many of which are beyond the parties' control,
that could cause actual results to differ materially from those indicated in
such forward-looking statements, including, but not limited to, the ability of
the parties to consummate the consummation of the acquisition of GCI Liberty by
Liberty Broadband (the "Combination") on a timely basis or at all and the
satisfaction of the conditions precedent to consummation of the Combination,
including, but not limited to, approval by the stockholders of GCI Liberty and
Liberty Broadband and regulatory approvals. These forward-looking statements
speak only as of the date of this Current Report on Form 8-K, and GCI Liberty
expressly disclaims any obligation or undertaking to disseminate any updates or
revisions to any forward-looking statement contained herein to reflect any
change in GCI Liberty's expectations with regard thereto or any change in
events, conditions or circumstances on which any such statement is based. Please
refer to the publicly filed documents of GCI Liberty, including its Annual
Reports on Form 10-K and Quarterly Reports on Form 10-Q, as well as the
preliminary proxy statement filed by GCI Liberty with the SEC on September 17,
2020, as well as any amendments or supplements to that document, for additional
information about GCI Liberty and about the risks and uncertainties related to
the business of GCI Liberty which may affect the statements made in this Current
Report on Form 8-K.
Additional Information
Nothing in this Current Report on Form 8-K shall constitute a solicitation to
buy or an offer to sell securities of GCI Liberty or Liberty Broadband. The
offer and sale of shares in the Combination will only be made pursuant to
Liberty Broadband's effective registration statement. GCI Liberty's
stockholders, Liberty Broadband's stockholders and other investors are urged to
read the joint proxy statement/prospectus included in the registration statement
on Form S-4 filed by Liberty Broadband with the SEC on September 17, 2020, as
well as any amendments or supplements to that document, because they will
contain important information about the Combination. Copies of these SEC filings
are available free of charge at the SEC's website (http://www.sec.gov). Copies
of the filings together with the materials incorporated by reference therein are
also available, without charge, by directing a request to GCI Liberty, Inc.,
12300 Liberty Boulevard, Englewood, Colorado 80112, Attention: Investor
Relations, Telephone: (720) 875-5900.
Participants in a Solicitation
GCI Liberty and Liberty Broadband and their respective directors and executive
officers and other persons may be deemed to be participants in the solicitation
of proxies in respect of the Combination. Information about GCI Liberty's
directors and executive officers is available in GCI Liberty's definitive proxy
statement for its 2020 annual meeting of stockholders, which was filed with the
SEC on April 10, 2020. Information about Liberty Broadband's directors and
executive officers is available in Liberty Broadband's definitive proxy
statement for its 2020 annual meeting of stockholders, which was filed with the
SEC on April 10, 2020. Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect interests, by
security holdings or otherwise, are contained in the joint proxy
statement/prospectus included in the registration statement on Form S-4 filed by
Liberty Broadband with the SEC on September 17, 2020, as well as any amendments
or supplements to that document. Investors should read
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the joint proxy statement/prospectus included in the registration statement on
Form S-4 carefully before making any voting or investment decisions. You may
obtain free copies of these documents from GCI Liberty as indicated above.
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