Item 1.01 Entry into a Material Definitive Agreement
On August 31, 2021, Sirius XM Radio Inc. (“Sirius XM”), our subsidiary, entered into an amendment (“Amendment No. 5”) to its existing $1.75 billion senior secured revolving credit facility with JPMorgan Chase Bank, N.A, as the administrative agent, and other agents and lenders, to, among other things, extend the maturity of the existing facility to August 31, 2026 (as amended, the “Credit Agreement”).
Amendment No. 5 provides for certain changes to Sirius XM’s $1.75 billion senior secured revolving credit facility, under which Sirius XM may borrow and reborrow from time to time. Sirius XM may use borrowings under the Credit Agreement for working capital and other general corporate purposes, including share repurchases, dividends and the financing of acquisitions. The obligations under the Credit Agreement are guaranteed by Sirius XM’s material domestic subsidiaries. The obligations under the Credit Agreement are secured by a lien on substantially all of our assets and the assets of Sirius XM’s material domestic subsidiaries, subject to certain exceptions.
The Credit Agreement contains incremental facilities and related debt and lien baskets, which allow Sirius XM to increase or incur new commitments under the revolving facility and/or incur new term loans or other forms of indebtedness, subject to the terms of the Credit Agreement.
Amendment No. 5, among other things, (i) modifies the pricing grid to reduce the interest margins applicable to the Revolving Loans (as defined in the Credit Agreement) and alters certain leverage levels in the pricing grid governing the rates of interest margin and commitment fees, (ii) extends the revolving termination date to August 31, 2026, (iii) modifies the uncommitted incremental facilities under the Credit Agreement and related debt and lien basket capacity correspondingly to include a “grower” component equal to 100% of consolidated operating cash flow for the prior four fiscal quarters, (iv) increases the thresholds from $300 million to $500 million for the cross-default and judgment default events of default, and (v) modifies or includes certain updates and changes to debt, lien, investment, disposition and restricted payment capacity and/or modifies the terms of transactions permitted thereunder.
Certain of the participants in the Credit Agreement and their respective affiliates have engaged in, and may in the future engage in, investment banking, advisory roles and other commercial dealings in the ordinary course of business with us and/or our affiliates. These participants have received, or may in the future receive, customary fees and commissions for these transactions.
The description of Amendment No. 5 contained herein is qualified in its entirety by reference to Amendment No. 5, a copy of which is filed herewith as Exhibit 10.1 and incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The response to Item 1.01 is hereby incorporated into this Item 2.03.
