Trade Receivables Facility
On October 16, 2023, Cardtronics entered into a Receivables Purchase Agreement (the “Purchase Agreement”), by and among Cardtronics, as servicer, NCR Atleos Receivables LLC (the “U.S. SPE”), a newly-formed and wholly-owned special purpose entity, as seller, NCR Atleos Canada Receivables LP, a newly-formed special purpose entity (the “Canadian SPE”), as seller, Cardtronics Canada Holdings Inc., as servicer, PNC Bank, National Association (“PNC”), as administrative agent, and PNC, MUFG Bank, Ltd., Victory Receivables Corporation and the other purchasers from time to time party thereto (the “Purchasers”). In connection therewith, (i) Cardtronics and ATM National, LLC, as sellers (collectively, the “U.S. Originators”), entered into a Purchase and Sale Agreement with the U.S. SPE (the “U.S. Sale Agreement”) and (ii) Cardtronics Canada Holdings Inc., as seller (the “Canadian Originator”), entered into a Canadian Purchase and Sale Agreement (the “Canadian Sale Agreement,” and together with the U.S. Sale Agreement, the “Sale Agreements”).
The Purchase Agreement and the Sale Agreements establish a revolving trade receivables facility (the “Trade Receivables Facility”) that provides for up to $166 million in funding based on the availability of eligible receivables and other customary factors, and the satisfaction of certain conditions. The Trade Receivables Facility has an initial term of two years, unless earlier terminated in accordance with the terms thereof, and may be extended by agreement of the parties.
Under the Trade Receivables Facility (i) the U.S. Originators will sell or contribute their trade receivables to the U.S. SPE as those trade receivables are originated and (ii) the Canadian Originator will sell or contribute its trade receivables to the Canadian SPE as those trade receivables are originated. The U.S. SPE will in turn sell to PNC for the benefit of the Purchasers an undivided ownership interest in a portion of the trade receivables that it acquires under the U.S. Sale Agreement. Such portion of the trade receivables will be de-recognized from the Company’s consolidated balance sheet and treated as sales under ASC 860. Any remaining portion of trade receivables that are not sold by the U.S. SPE and all of the trade receivables acquired by the Canadian SPE pursuant to the Canadian Sale Agreement are pledged to the Purchasers to secure repayment of the trade receivables sold to the Purchasers and the performance of other obligations of the U.S. SPE and the Canadian SPE under the Purchase Agreement.
All of the assets of the U.S. SPE and the Canadian SPE are restricted collateral for the payment of their obligations under the Trade Receivables Facility. None of the assets or credit of the U.S. SPE or the Canadian SPE is available to satisfy the debts and obligations owed to the creditors of the U.S. Originators, the Canadian Originator or any of their affiliates, including the Company. The U.S. Originators, the Canadian Originator and each other originator that may participate in the Trade Receivables Facility is liable for its own customary representations, warranties, covenants and indemnities as originator and/or servicer of the trade receivables. The Company entered into a guaranty on customary terms pursuant to which it guarantees the performance of the origination and servicing obligations of its subsidiaries that participate in the Trade Receivables Facility. The Company will include the assets, liabilities and results of operations of the U.S. SPE and the Canadian SPE in its consolidated financial statements.
The investments made by the Purchasers in the trade receivables under the Purchase Agreement accrue yield at a fluctuating rate based on SOFR (or a successor benchmark determined in accordance with the terms of the Purchase Agreement) or commercial paper interest rates.
In addition, the U.S. SPE paid certain upfront closing fees to the administrative agent and the structuring agent for their services and will pay annual commitment and other customary fees to the Purchasers. The U.S. SPE may prepay any investment made by the Purchasers under the Purchase Agreement with two business days’ notice, and may also reduce the facility limit with 15 days’ prior notice.
The Trade Receivables Facility contains various customary affirmative and negative covenants and default and termination provisions, which provide for the acceleration of the investments made by the Purchasers under the Trade Receivables Facility in circumstances including, but not limited to, failure to pay yield on the capital of the Purchasers when due, the failure to return the capital of the Purchasers when due, breach of representation, warranty or covenant, certain insolvency events or failure to maintain the security interest in the trade receivables, and defaults under other material indebtedness.
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