Artisan Partners Asset Management Inc. (NYSE:APAM) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry Into a Material Definitive Agreement.
On August 16, 2017, Artisan Partners Holdings LP (“Holdings”), of which Artisan Partners Asset Management Inc. (the “Company”) is the sole general partner, (i) issued $60 million of 4.29% Series D Senior Notes and used the proceeds to repay the $60 million of 4.98% Series A Senior Notes maturing on August 16, 2017, and (ii) amended and extended its $100 million revolving credit facility for an additional five-year period.
Note Purchase Agreement
Holdings issued the $60 million of Series D Senior Notes in a private placement transaction to a Note Purchase Agreement dated August 16, 2017, between Holdings and the note purchasers named therein. The Series D Notes will bear interest at a rate of 4.29% per annum and will mature on August 16, 2025.
In addition to other covenants, the Note Purchase Agreement contains the following financial covenants:
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Holdings will not permit its Leverage Ratio (as defined in the Note Purchase Agreement) on any date to exceed 3.00 to 1.00. |
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Holdings will not permit its Interest Coverage Ratio (as defined in the Note Purchase Agreement) in respect of any period of four consecutive fiscal quarters to be less than 4.00 to 1.00. |
The Note Purchase Agreement includes customary events of default. Upon an event of default, the Series D Notes then outstanding generally will become due and payable. In addition, in the event of a Change of Control (as defined in the Note Purchase Agreement) or if Artisan’s average AUM for a fiscal quarter is below $45 billion, Holdings is generally required to offer to pre-pay the notes. Artisan Partners Limited Partnership, a wholly-owned subsidiary of Holdings, has guaranteed Holdings’ obligations under the terms of the Note Purchase Agreement.
This summary of the Note Purchase Agreement is qualified in its entirety by reference to the terms of the Note Purchase Agreement attached hereto as Exhibit 10.1, which is incorporated herein by reference.
Amended and Restated Five-Year Revolving Credit Agreement
Holdings also amended and extended its $100 million five-year revolving credit agreement with Citibank, N.A. as administrative agent and Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated as joint lead arrangers and joint book runners. The Amended and Restated Five-Year Revolving Credit Agreement was originally entered into on August 16, 2012, and was scheduled to terminate on August 16, 2017. The amended agreement also has a term of five years.
Borrowings under the amended agreement will generally bear interest at a rate per annum equal to, at Holdings’ election, (i)LIBOR adjusted by a statutory reserve percentage plus an applicable margin ranging from 1.50% to 2.50%, depending on Holdings’ leverage ratio or (ii)an alternate base rate equal to the highest of (a) Citibank, N.A.’s prime rate, (b) the federal funds effective rate plus 0.50% and (c) the daily one-month LIBOR adjusted by a statutory reserve percentage plus 1.00%, plus, in each case, an applicable margin ranging from 0.50% to 1.50%, depending on Holdings’ leverage ratio. Unused commitments will bear interest at a rate that ranges from 0.175% to 0.500% per annum, depending on Holdings’ leverage ratio.
The terms and conditions, covenants, and events of default under the Amended and Restated Five-Year Revolving Credit Agreement are substantially similar to those described above under the Note Purchase Agreement. Artisan Partners Limited Partnership, a wholly-owned subsidiary of Holdings, has guaranteed Holdings’ obligations under the amended agreement. As of the date of this filing, there were no outstanding borrowings under the amended agreement.
This summary of the Amended and Restated Five-Year Revolving Credit Agreement is qualified in its entirety by reference to the terms of the agreement attached hereto as Exhibit 10.2, which is incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-balance Sheet Arrangement of a Registrant.
The information included in Item 1.01 above is incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits
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Exhibit Number |
Description of Exhibit |
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10.1 |
Note Purchase Agreement, dated as of August 16, 2017, among Artisan Partners Holdings LP and the purchasers listed therein |
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10.2 |
Amended and Restated Five-Year Revolving Credit Agreement, dated as of August 16, 2017, among Artisan Partners Holdings LP, the lenders named therein and Citibank, N.A., as Administrative Agent |
Artisan Partners Asset Management Inc. ExhibitEX-10.1 2 ex1012017818.htm EXHIBIT 10.1 Exhibit Exhibit 10.1EXECUTION VERSIONARTISAN PARTNERS HOLDINGS LP $60,…To view the full exhibit click here
About Artisan Partners Asset Management Inc. (NYSE:APAM)
Artisan Partners Asset Management Inc. is an investment management firm focused on providing investment strategies to clients around the global. The Company’s operations are conducted through Artisan Partners Holdings LP and its subsidiaries. It operates in the investment management industry. The Company provides investment management services to separate accounts and mutual funds, and other pooled investment vehicles. The Company has over seven autonomous investment teams that manage a range of the United States, non-United States and global investment strategies. The Company provides its clients with multiple long-only, equity investment strategies spanning market capitalization segments and investing styles in both the United States and non-United States markets. It also offers a fixed income strategy, the Artisan High Income strategy.
