SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
ALLIANCE DATA SYSTEMS CORPORATION
(Exact Name of Registrant as Specified in Charter)
DELAWARE
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31-1429215
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(State or Other Jurisdiction
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(Commission
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(IRS Employer
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of Incorporation)
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File Number)
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Identification No.)
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7500 DALLAS PARKWAY, SUITE 700
(Address and Zip Code of Principal Executive Offices)
(Registrant's Telephone Number, including Area Code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of
the Registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
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Item 1.01 Entry into a Material Definitive Agreement.
Purchase Agreement
Alliance Data Systems Corporation (the "
Company") previously reported in a Current Report on Form 8-K that
the Company had entered into a purchase agreement on
July 24, 2014 (the "
Purchase Agreement") under which it had agreed to sell $600 million aggregate principal amount of its 5.375% senior notes due 2022 (the "
Notes") to certain initial purchasers named in the Purchase Agreement (collectively, the "
Initial Purchasers").
The offering of the Notes closed on July 29, 2014. A description of the material terms of the Purchase Agreement is included in the Company's Current Report
on Form 8-K filed with the Securities and Exchange Commission on July 28, 2014.
The Notes are governed by an
indenture (the "
Indenture") dated
July 29, 2014 among
the Company, certain of its
subsidiaries as guarantors and Wells Fargo Bank, N.A., as trustee (the "
Trustee"). Pursuant to the
Indenture, interest on the Notes will accrue at a rate of 5.375% per annum on the principal amount from
July 29, 2014, payable semi-annually in arrears on February
1 and August 1 of each year, beginning on
February 1, 2015. The Notes will mature on
August 1, 2022, subject to earlier repurchase or redemption.
Guarantees
The Notes are guaranteed on a senior unsecured basis by each of
the Company's existing and future domestic restricted
subsidiaries that guarantees its domestic credit agreement.
Ranking
The Notes rank equally in right of payment with
the Company's existing and future senior unsecured debt, including indebtednesses under
the Company's credit agreement and existing senior notes, and senior in right of payment to any future debt that is expressly subordinated in right of payment to the Notes. The guarantees rank equally in right of payment with all of the guarantors' existing and future senior unsecured indebtedness, including their guarantees of indebtedness under
the Company's credit agreement and its existing senior notes, and senior in right of payment to any future debt that is expressly subordinated in right of payment to the guarantees. The Notes and the guarantees are effectively
subordinated to
the Company's and guarantors' secured debt to the extent of the value of the assets securing such debt. The Notes and the guarantees are structurally subordinated to all existing and future liabilities (including trade payables) of
the Company's
subsidiaries that do not guarantee the Notes.
Optional Redemption
The Company may redeem some or all of the Notes at any time at a redemption price equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to the applicable redemption date and the applicable premium specified in the
Indenture. Prior to
August 1, 2017, the applicable premium is a
"make-whole" amount; on or after such date, the applicable premium is specified in a table in the
Indenture. In addition, at any time prior to
August 1, 2017,
the Company may, with an amount
equal to the net cash proceeds of one or more qualified equity offerings, as defined in the
Indenture, redeem up to 35% of the aggregate principal amount of the outstanding Notes at a redemption price equal to 105.375% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to the applicable redemption date, provided that such redemption occurs within 90 days following the closing of such qualified equity offering.
Change of Control; Mandatory Offer to Repurchase Following Certain Asset Sales
Upon the occurrence of certain kinds of changes of control,
the Company must offer to purchase the Notes at 101% of their principal amount, plus accrued and unpaid interest to the date of purchase. Within 365 days after the sale of certain assets of
the Company or its restricted
subsidiaries, as defined in the
Indenture,
the Company may either repay certain debt or reinvest the excess proceeds of such asset sales as set forth in the
Indenture.
To the extent of any failure to make qualifying repayments or reinvestments,
the Company must offer to use such excess proceeds to repurchase the Notes on the terms set forth in the
Indenture.
Covenants
The
Indenture contains covenants that limit, among other things,
the Company's ability and the ability of some of its
subsidiaries to (i) incur additional debt, (ii) declare or pay dividends, redeem stock or make other distributions to stockholders, (iii) make investments, (iv) create liens or use assets as security in other transactions, (v) merge or consolidate, or sell, transfer, lease or dispose of substantially all of
the Company's assets, (vi) enter into transactions with affiliates, (vii) sell or transfer certain assets and (viii) enter into any consensual encumbrance or restriction on the ability
of certain of
the Company's
subsidiaries to pay dividends or make loans or sell assets. The covenants are subject to a number of important qualifications, exceptions and limitations.
Events of Default
The
Indenture includes customary events of default, including, among other things, payment default, covenant default, certain defaults under other indebtedness of
the Company or certain of its
subsidiaries, the failure to timely satisfy judgments over a certain sum against
the Company or certain of its
subsidiaries, and bankruptcy, insolvency or reorganization affecting
the Company or certain of its
subsidiaries.
No Registration Rights
The Company will not file a registration statement for the resale of the Notes. As a result, holders may only resell the Notes pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"), to the extent available, and other applicable securities laws.
Use of Proceeds
After deducting the fees payable to the Initial Purchasers and the estimated offering expenses, the net proceeds to
the Company from the offering of Notes are estimated to be approximately $587.6 million.
The Company expects to use the net proceeds of the offering of the Notes to repay a portion of the outstanding indebtedness under its revolving credit facility.
Certain of the Initial Purchasers and certain of their affiliates have provided and/or may in the future provide financial advisory, investment banking and commercial banking services in the ordinary course of business to
the Company, the guarantors and certain of their affiliates, for which they have received, and may in the future receive, customary fees and expense reimbursement. Affiliates of certain Initial Purchasers in this offering are lenders and/or agents under
the Company's 2013 Credit Agreement and will receive their pro rata portion of the net proceeds from this offering that will be used to repay a portion of outstanding indebtedness under
the Company's revolving credit facility. Additionally,
affiliates of J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Barclays Capital Inc. are counterparties under
the Company's convertible note warrants and engage in hedging transactions from time to time in
the Company's stock in connection with those instruments. In addition, Bank of America Corporation, an affiliate of Merrill Lynch, Pierce, Fenner & Smith Incorporated, owns more than 5% of
the Company's outstanding common stock. In addition, certain of the Initial Purchasers (or affiliates thereof) may be customers of
the Company and its
subsidiaries
under customary contractual arrangements from time to time.
The Notes and the guarantees (together, the "
Securities") have not been, and will not be, registered under the Securities Act.
The Company offered and sold the Securities to the Initial Purchasers in reliance on the exemption from registration requirements provided by Section 4(a)(2) of the Securities Act.
The Company relied on this exemption from registration requirements in part based on representations made by the Initial Purchasers in the Purchase Agreement. The Initial Purchasers then sold the Securities to qualified institutional buyers pursuant to exemptions from registration requirements provided by Rule 144A and Regulation S under the Securities Act. This Current Report on Form 8-K does not constitute an offer to sell nor a solicitation of an offer to
buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
Item 3.03 Material Modification to Rights of Security Holders.
Item 7.01 Regulation FD Disclosure.
On
July 30, 2014,
the Company issued a
press release announcing the closing of the offering of the Notes. A copy of this
press release is attached hereto as
Exhibit 99.1. The information contained in
Exhibit 99.1 shall not be deemed
"filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed
incorporated by reference
in any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No.
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Document Description
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4.1
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99.1
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Alliance Data Systems Corporation
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By:
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Executive Vice President and
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Chief Financial Officer
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Exhibit No.
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Document Description
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4.1
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99.1
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