Item 1.01. Entry into a Material Definitive Agreement.
On March 28, 2024, Connect Midco Limited (“Holdings”), Connect Bidco Limited (“Bidco”), Connect Finco SARL (“Lux Finco”), Connect U.S. Finco LLC (“US Finco”) and certain other subsidiary loan parties (collectively, with Holdings, Bidco, Lux Finco and US Finco, “Inmarsat,” and all indirect wholly owned subsidiaries of Viasat, Inc. (“Viasat”)) entered into Amendment No. 4 to Credit Agreement with Barclays Bank plc, as existing administrative agent and collateral agent, Bank of America, N.A., as successor administrative agent and collateral agent, and the lenders and issuing banks party thereto (the “Refinancing Amendment”) to amend the existing Credit Agreement, dated December 12, 2019, among Holdings, Bidco, Lux Finco, US Finco, certain subsidiaries of Bidco, Barclays Bank plc, as administrative agent and collateral agent, and the lenders and issuing banks party thereto (the “Existing Credit Agreement”), under which the existing $700 million revolving credit facility maturing in December 2024 and a majority of the existing $1.75 billion term loan facility maturing in December 2026 (the “2026 TLB Facility”) under the Existing Credit Agreement were replaced with a new $550 million (undrawn) revolving credit facility that matures in March 2027 (or (i) if more than $100 million of borrowings under the 2026 TLB Facility remains outstanding on the date that is 91 days prior to the maturity of the 2026 TLB Facility, such date or (ii) if more than $100 million of Inmarsat’s existing 6.750% senior secured notes due 2026 (the “Inmarsat 2026 Notes”) remains outstanding on the date that is 91 days prior to the maturity of the Inmarsat 2026 Notes, such date) and a new $1.3 billion term loan facility that was fully drawn at closing and matures in September 2029. Proceeds from the new term loan facility, together with cash on hand, were used to repay approximately $1,384 million of the approximately $1,684 million of outstanding borrowings under the 2026 TLB Facility, resulting in $300 million in principal amount of term loan borrowings remaining outstanding under the 2026 TLB Facility at closing.
Under the Existing Credit Agreement, as amended by the Refinancing Amendment (as so amended, the “Amended Credit Agreement”), borrowings under the new term loan facility are required to be repaid in quarterly installments of $3.25 million, followed by a final installment on the maturity date thereof. As a result of certain voluntary prepayments made in respect of the 2026 TLB Facility at the closing of the Refinancing Amendment, all quarterly amortization installments with respect to the 2026 TLB Facility have been reduced to $0, with the only remaining scheduled principal repayment being a final installment of $300 million on the maturity date of the 2026 TLB Facility in December 2026.
Borrowings under the Amended Credit Agreement, (1) in the case of borrowings denominated in U.S. Dollars, bear interest, at Inmarsat’s option, at either (i) the highest of (x) the greater of the federal funds rate or the overnight banking fund rate for such day plus 0.50%, (y) the forward-looking one-month term SOFR rate plus 1.00% or (z) the administrative agent’s prime rate as announced from time to time, or (ii) the forward-looking term SOFR rate for the applicable interest period (subject to, in the case of the new term loan facility, a floor of 0.50% per annum, in the case of the new revolving credit facility, a floor of 0.00% per annum and, in the case of the 2026 TLB Facility, a floor of 1.00% per annum), and (2) in the case of borrowings denominated in available currencies other than U.S. Dollars, bear interest based upon the applicable benchmark for such currencies as described in the Amended Credit Agreement, plus, in all cases, an applicable margin. The applicable margin for the 2026 TLB Facility remains at 2.50% per annum for base rate loans and 3.50% per annum for SOFR loans and the applicable margin for the new term loan facility is 3.50% per annum for base rate loans and 4.50% per annum for SOFR loans. The applicable margin for borrowings under the new revolving credit facility ranges between 1.50% and 2.25% per annum (in the case of base rate loans) and 2.50% and 3.25% per annum (in the case of SOFR loans), in each case, based on Inmarsat’s total net leverage ratio.
The Amended Credit Agreement contains covenants that restrict, among other things, Inmarsat’s ability to incur additional debt, grant liens, sell assets, make investments and acquisitions, pay dividends and make certain other restricted payments. In addition, the Amended Credit Agreement contains a total net leverage ratio financial covenant and an interest coverage ratio financial covenant, each of which apply solely to the new revolving credit facility (unless the
