| Item 1.01. | Entry into a Material Definitive Agreement. |
On January 8, 2024, Take-Two Interactive Software, Inc. (the “Company”) completed its add-on offering and sale of $350 million aggregate principal amount of its senior notes, consisting of $50 million additional principal amount of its 5.000% Senior Notes due 2026 (the “2026 Notes”) and $300 million additional principal amount of its 4.950% Senior Notes due 2028 (the “2028 Notes”). The additional 2026 Notes and 2028 Notes (the “New Notes”) were issued as additional notes under the existing Indenture (as defined below) pursuant to which the Company previously issued $500 million aggregate principal amount of its 5.000% Senior Notes due 2026 and $500 million aggregate principal amount of its 4.950% Senior Notes due 2028 (the “Existing Notes” and, together with the New Notes, the “Notes”), all of which remain outstanding. The New Notes have the same terms as the respective series of Existing Notes other than the date of issuance and the initial offering price, are treated as a single series of securities with the respective series of Existing Notes under the Indenture, are fungible with the respective series of Existing Notes for U.S. federal income tax purposes and have the same respective CUSIP numbers as the Existing Notes.
All of the Notes were issued under the 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 to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on April 14, 2022, and (i) the fifth supplemental indenture, with respect to the 2026 Notes and (ii) the sixth supplemental indenture, with respect to the 2028 Notes (collectively, the “Supplemental Indentures” and together with the Base Indenture, the “Indenture”), each dated as of April 14, 2023, between the Company and the Trustee, which are incorporated by reference to Exhibits 4.1 and 4.2 to the Company’s Current Report on Form 8-K filed with the SEC on April 14, 2023.
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 2026 Notes mature on March 28, 2026 and bear interest at an annual rate of 5.000%. The 2028 Notes mature on March 28, 2028 and bear interest at an annual rate of 4.950%. The Company pays interest on the Notes semi-annually on March 28 and September 28 of each year.
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.
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 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.
On January 4, 2024, the Company entered into an underwriting agreement (the “Underwriting Agreement”), by and among the Company and J.P. Morgan Securities LLC, as representative of the several underwriters named in Schedule 1 thereto, in connection with the underwritten public add-on offering of the New Notes. A copy of the Underwriting Agreement is attached hereto as Exhibit 1.1 and incorporated by reference herein. The New Notes were offered pursuant to an effective registration statement on Form S-3 (Registration Statement No. 333-264153) filed with the SEC, as supplemented by the preliminary prospectus supplement filed with the SEC on January 4, 2024 and final prospectus supplement filed with the SEC on January 8, 2024.
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