Alliance Data restates credit agreement for $3.05 billion term loan, $1.57 billion revolver

By Marisa Wong

Morgantown, W.Va., June 19 – Alliance Data Systems Corp. entered into an amended and restated credit agreement on June 14 and then amended that credit agreement on June 16.

Together, the restated credit agreement and amendment provide for a $3,052,579,963.75 term loan and a $1,572,420,036.25 revolving credit facility with a $65 million sublimit for Canadian dollar borrowings and a $65 million sublimit for swingline loans, according to an 8-K filing with the Securities and Exchange Commission.

The credit agreement includes an uncommitted accordion feature of up to $750 million. In some cases, the accordion provides for additional debt up to an amount that would not cause the total leverage ratio for the most recent four consecutive fiscal quarter period to exceed 3 to 1 on a pro forma basis.

At closing and the amendment date, the company borrowed $3,421,977,754.11 in total, consisting of $3,052,579,963.75 term loans and $369,397,790.36 revolving loans. Proceeds will be used to finance general corporate and working capital needs.

The unsecured credit agreement refinances and replaces the company’s credit agreement dated July 10, 2013.

The new loans are scheduled to mature on June 14, 2022.

The term loan provides for aggregate principal payments equal to 2.5% of the initial term loan amount in each of the first and second years and 5% in each of the third, fourth and fifth years, payable in equal quarterly installments beginning Sept. 30.

The applicable margin for U.S. dollar-denominated Libor loans ranges from 125 basis points to 200 bps, depending on the company’s total leverage ratio.

Canadian dollar loans will bear interest at (a) the higher of Wells Fargo’s prime rate and CDOR plus 100 bps plus (b) a margin of 25 bps to 100 bps, based on the total leverage ratio.

The company will also pay a commitment fee of 25 bps to 35 bps, based on the total leverage ratio.

The credit agreement requires the company to satisfy some financial covenants, including a maximum total leverage ratio and a minimum ratio of consolidated operating EBITDA to consolidated interest expense.

Wells Fargo Securities, LLC, Bank of America Merrill Lynch, MUFG, JPMorgan Chase Bank, NA, Mizuho Bank, Ltd., SunTrust Robinson Humphrey, Inc., BNP Paribas Securities Corp., Fifth Third Bank, RBC Capital Markets, Sumitomo Mitsui Banking Corp. and Bank of Nova Scotia are the joint lead arrangers and joint bookrunners.

Bank of America, NA and MUFG are co-syndication agents; Wells Fargo Bank, NA is administrative agent; and JPMorgan Chase Bank, Mizuho Bank, SunTrust Bank, BNP Paribas, Fifth Third Bank, Royal Bank of Canada, Sumitomo Mitsui Banking, Scotiabank, Canadian Imperial Bank of Commerce, New York Branch and Citibank, NA are co-documentation agents.

Alliance Data Systems is a Plano, Texas-based provider of data-driven marketing and loyalty solutions.

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