| Item 1.01. | Entry into a Material Definitive Agreement. |
On April 14, 2022, Take-Two Interactive Software, Inc. (the “Company”) completed its offering and sale of $2.7 billion aggregate principal amount of its senior notes, consisting of $1.0 billion principal amount of its 3.300% Senior Notes due 2024 (the “2024 Notes”), $600 million principal amount of its 3.550% Senior Notes due 2025 (the “2025 Notes”), $600 million principal amount of its 3.700% Senior Notes due 2027 (the “2027 Notes”) and $500 million principal amount of its 4.000% Senior Notes due 2032 (the “2032 Notes” and, together with the 2024 Notes, the 2025 Notes and the 2027 Notes, the “Notes”).
The Notes were issued under an indenture, dated as of April 14, 2022 (the “Base Indenture”), between the Company and The Bank of New York Mellon, as trustee (the “Trustee”), which is incorporated by reference as Exhibit 4.1 hereto, and (i) a first supplemental indenture, with respect to the 2024 Notes, (ii) a second supplemental indenture, with respect to the 2025 Notes, (iii) a third supplemental indenture, with respect to the 2027 Notes and (iv) a fourth supplemental indenture, with respect to the 2032 Notes (collectively, the “Supplemental Indentures” and together with the Base Indenture, the “Indenture”), each dated as of April 14, 2022, between the Company and the Trustee, which are filed as Exhibits 4.2, 4.3, 4.4 and 4.5 hereto, respectively.
The Notes are the Company’s senior unsecured obligations and rank equally with all of the Company’s other existing and future unsubordinated obligations. The 2024 Notes mature on March 28, 2024 and bear interest at an annual rate of 3.300%. The 2025 Notes mature on April 14, 2025 and bear interest at an annual rate of 3.550%. The 2027 Notes mature on April 14, 2027 and bear interest at an annual rate of 3.700%. The 2032 Notes mature on April 14, 2032 and bear interest at an annual rate of 4.000%. The Company will pay interest on the 2024 Notes semi-annually on March 28 and September 28 of each year, commencing September 28, 2022. The Company will pay interest on each of the 2025 Notes, 2027 Notes and 2032 Notes semi-annually on April 14 and October 14 of each year, commencing October 14, 2022.
The Notes are not entitled to any sinking fund payments. The Company may redeem each series of the Notes at any time in whole or from time to time in part at the applicable redemption prices set forth in each Supplemental Indenture. If the merger agreement in connection with the Company’s previously announced acquisition of Zynga Inc. (“Zynga”) is terminated or if the acquisition does not close on or prior to January 9, 2023, the Company will be required to redeem the Notes at a redemption price equal to 101% of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the special mandatory redemption date.
Upon the occurrence of a Change of Control Repurchase Event (as defined in each of the Supplemental Indentures) with respect to a series of the Notes, each holder of the Notes of such series will have the right to require the Company to purchase that holder’s Notes of such series at a price equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid interest to, but excluding, the date of repurchase, unless the Company has exercised its option to redeem all the Notes.
In the case of an event of default arising from certain events of bankruptcy or insolvency with respect to the Company, all outstanding Notes will become due and payable immediately. If any other event of default specified in the Indenture occurs and is continuing with respect to any series of the Notes, the Trustee or the holders of at least 25% in aggregate principal amount of that series of the outstanding Notes may declare the principal of such series of Notes immediately due and payable.
The Indenture contains certain limitations on the ability of the Company and its subsidiaries to grant liens without equally securing the Notes, or to enter into certain sale and lease-back transactions. These covenants are subject to a number of important exceptions and limitations, as further provided in the Indenture.
The foregoing description of the Notes, the Base Indenture and the Supplemental Indentures does not purport to be complete and is qualified in its entirety by reference to such documents.
| Item 1.02 | Termination of a Material Definitive Agreement. |
In connection with the closing of the Notes offering, the Company terminated its financing commitment letter (as amended from time to time, the “Bridge Commitment Letter”) with J.P. Morgan Securities LLC, Wells Fargo Bank, National Association, and certain other financial institutions party thereto, which had provided for a new unsecured bridge loan facility in an aggregate principal amount of $2.70 billion.
| Item 2.03. | Creation of Direct Financial Obligation. |
The disclosure set forth in Item 1.01 above is incorporated by reference into this Item 2.03.
Forward-Looking Statements
Statements contained herein which are not historical facts may be considered forward-looking statements under federal securities laws and may be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” “will,” or words of similar meaning and include, but are not limited to, statements regarding the proposed business combination of Take-Two and Zynga and the outlook for Take-Two’s or Zynga’s future business and financial performance. Such forward-looking statements are based on the
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