| Item 1.01. | Entry into a Material Definitive Agreement. |
On December 18, 2018, Lamar Media Corp. (“Lamar Media”), a wholly owned subsidiary of Lamar Advertising Company (the “Company”), entered into that certain Receivables Financing Agreement (the “Receivables Financing Agreement”) as initial servicer with its newly-formed, wholly-owned special purpose entities, Lamar QRS Receivables, LLC and Lamar TRS Receivables, LLC (the “Accounts Receivable Securitization Special Purpose Subsidiaries”) as borrowers, PNC Bank, National Association as Administrative Agent, PNC Capital Markets LLC as Structuring Agent and certain lenders from time to time party thereto. The Receivables Financing Agreement establishes a $175.0 million accounts receivable securitization program (the “Accounts Receivable Securitization Program”), maturing on December 17, 2021.
Pursuant to two separate Purchase and Sale Agreements dated December 18, 2018 (the “Purchase and Sale Agreements”), each of which is among Lamar Media as initial Servicer, certain of Lamar Media’s subsidiaries and an Accounts Receivable Securitization Special Purpose Subsidiary, the subsidiaries sold substantially all of their existing and future accounts receivable balances to the Accounts Receivable Securitization Special Purpose Subsidiaries. The Accounts Receivable Securitization Special Purpose Subsidiaries use the accounts receivable balances to collateralize loans pursuant to the Receivables Financing Agreement. Lamar Media retains the responsibility of servicing the accounts receivable balances pledged as collateral for the Accounts Receivable Securitization Program and provides a performance guaranty (the “Performance Guaranty”).
Loans under the Receivables Financing Agreement will accrue interest at a reserve-adjusted LIBOR. In addition, the Borrowers paid certain closing and structuring fees to PNC Capital Markets, LLC and will pay certain other customary fees to the Lenders.
The Receivables Financing Agreement, the Purchase and Sale Agreements and the Performance Guaranty contain customary representations and warranties, affirmative and negative covenants, and termination event provisions, including but not limited to those providing for the acceleration of amounts owed under the Accounts Receivable Securitization Program if, among other things, the Accounts Receivable Securitization Special Purpose Subsidiaries fail to make payments when due, Lamar Media, the subsidiaries party to the Purchase and Sale Agreements or the Accounts Receivable Securitization Special Purpose Subsidiaries become insolvent or subject to bankruptcy proceedings or certain judicial judgments, breach certain representations and warranties or covenants or default under other material indebtedness, or if Lamar Media fails to maintain the maximum secured debt ratio required under Lamar Media’s credit facility.
The foregoing descriptions of the Receivables Financing Agreement, the Purchase and Sale Agreements and the Performance Guaranty are qualified in their entirety by reference to the Receivables Financing Agreement, the Purchase and Sale Agreements and the Performance Guaranty, copies of which are filed as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, to this Current Report on Form8-K and are incorporated herein by reference.
