Heartland Payment Systems details new term loan, revolver

By Marisa Wong

Madison, Wis., Sept. 8 – Heartland Payment Systems, Inc. disclosed details of its new credit facility in an 8-K filed Monday with the Securities and Exchange Commission.

The company entered into an amended and restated senior secured credit facility on Sept. 4 that includes a five-year $375 million secured term loan and a $400 million revolving credit line.

The revolver still includes a $35 million sub-facility for issuance of letters of credit and a $35 million sub-facility for swingline loans.

The term loan amortizes on a quarterly basis as follows, with the remaining principal balance due on Sept. 4, 2019: 5% of the initial facility to be payable in each of the first three years, 7.5% payable in the fourth year and 10% payable in the fifth year. The term loan is also subject to mandatory prepayment from proceeds of asset dispositions, casualty or condemnation events, issuance of debt and extraordinary receipts.

The revolver may be increased and new incremental term loans may be issued in a total principal amount of up to $150 million.

Borrowings under the credit facility bear interest at Libor plus a margin based on the company’s current leverage ratio. The margin ranges from 125 basis points to 225 bps.

The revolver is also subject to an unused commitment fee of 20 bps to 45 bps and a letter-of-credit fee of 125 bps to 225 bps, also based on the leverage ratio.

The credit agreement contains covenants requiring the company to maintain leverage and fixed-charge coverage ratios.

Joint lead arrangers and joint bookrunners for the new facility are Bank of America Merrill Lynch, BMO Capital Markets Corp. and SunTrust Robinson Humphrey, Inc. Bank of America, NA is the administrative agent, swingline lender and letter-of-credit issuer. BMO Harris Bank, NA and SunTrust Bank are joint syndication agents.

The new term loan was used to fund Heartland’s acquisition of TouchNet Information Systems, Inc., according to a prior press release.

Revolver proceeds will be used to provide ongoing working capital and for general corporate purposes.

The facility closed simultaneously with the acquisition last Thursday.

Heartland is a Princeton, N.J.-based payment processor and provider of merchant business solutions. TouchNet is a Lenexa, Kan.-based integrated commerce solutions provider to higher-education institutions.

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