CSG SYSTEMS INTERNATIONAL, INC. (NASDAQ:CSGS) Files An 8-K Entry into a Material Definitive Agreement
Item 2.03 Entry into a Material Definitive Agreement.

Transaction Overview. On March 5, 2018, CSG Systems International, Inc. (“CSG”) refinanced its existing term bank debt and revolving credit agreement with a new debt arrangement with a consortium of banks.The key benefits of the refinanced agreement include:(i) an increase in the tenor of the loan from February 2020 to March 2023; (ii) a reduction in the interest rate and other fees; and (iii) financial and other restrictive covenants that are equal to that of the existing agreement. The new debt agreement increased CSG’s liquidity and capital resources position by approximately $30 million.

Transaction Details. On March 5, 2018, CSG entered into a new $350 million credit agreement (the “2018 Credit Agreement”) with Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities, LLC, as Joint Lead Arrangers and Joint Bookrunners; Wells Fargo Bank, National Association, as Syndication Agent; Compass Bank and HSBC Bank USA, National Association, as Co-Documentation Agents; and Bank of America, N.A., as Administrative Agent, Collateral Agent, Swingline Lender and Issuing Bank.The 2018 Credit Agreement replaced the credit agreement that CSG entered into in February 2015 (the “2015 Credit Agreement”).

The 2018 Credit Agreement provides borrowings in the form of:(i) a $150 million aggregate principal five-year term loan (the “2018 Term Loan”); and (ii) a $200 million aggregate principal five-year revolving loan facility (the “2018 Revolver”).With the $150 million proceeds from the 2018 Term Loan, CSG repaid the outstanding $120 million balance of the term loan under the 2015 Credit Agreement, resulting in a net increase of available cash by $30 million, a portion of which was used to pay certain fees and expenses in connection with the refinancing, and the remainder of which will be used for general corporate purposes.

The interest rates under the 2018 Credit Agreement are based upon CSG’s choice of an adjusted LIBOR rate plus an applicable margin of 1.50% – 2.50%, or an alternate base rate plus an applicable margin of 0.50% -1.50%, with the applicable margin, depending on CSG’s then-net secured total leverage ratio.CSG will pay a commitment fee of 0.200% – 0.375% of the average daily unused amount of the 2018 Revolver, with the commitment fee rate also dependent upon CSG’s then-net secured total leverage ratio.

The 2018 Credit Agreement includes mandatory repayments of the aggregate principal amount of the 2018 Term Loan (payable quarterly) for the first, second, third, fourth, and fifth years, with the remaining principal balance due at maturity.The 2018 Credit Agreement has no prepayment penalties and requires mandatory repayments under certain circumstances, including:(i) asset sales or casualty proceeds; and (ii) proceeds of debt or preferred stock issuances.

The 2018 Credit Agreement contains customary affirmative covenants.In addition, the 2018 Credit Agreement has customary negative covenants that places limits on CSG’s ability to:(i) incur additional indebtedness; (ii) create liens on its property; (iii) make investments; (iv) enter into mergers and consolidations; (v) sell assets; (vi) declare dividends or repurchase shares; (vii) engage in certain transactions with affiliates; and (viii) prepay certain indebtedness; and (ix) issue capital stock of subsidiaries.CSG must also meet certain financial covenants to include:(i) a maximum total leverage ratio; (ii) a maximum first-lien leverage ratio; and (iii) a minimum interest coverage ratio.

In conjunction with the 2018 Credit Agreement, CSG entered into a security agreement in favor of Bank of America N.A, as collateral agent (the “Security Agreement”).Under the Security Agreement and 2018 Credit Agreement, certain of CSG’s domestic subsidiaries have guaranteed its obligations, and CSG and such subsidiaries have pledged substantially all of their assets to secure the obligations under the 2018 Credit Agreement and such guarantees.

The 2018 Credit Agreement will be filed with CSG’s Quarterly Report on Form 10-Q for the quarter ending March 31, 2018.

Item 2.03Creation of a Direct Financial Obligation or an Obligation under an Off- Balance Sheet Arrangement of a Registrant.

The information described above under “Item 2.03”, Entry into a Material Definitive Agreement, is hereby incorporated by reference into this Item 2.03.

About CSG SYSTEMS INTERNATIONAL, INC. (NASDAQ:CSGS)

CSG Systems International, Inc. is a provider of business support solutions primarily serving the communications industry. The Company’s solutions coordinate and manage various aspects of service providers’ customer interactions, from the activation of customer accounts, to the support of various service activities, and through the presentment, collection and accounts receivables management of monthly customer statements. Its product solutions include cable and satellite care and billing, convergent rating and billing, mediation and data management, wholesale settlement and routing, customer interaction management, business intelligence, and content management and monetization. Its billing and customer care platform, Advanced Convergent Platform, is the system for cable and satellite providers in North America. Its customer interaction management solutions help delivers a personal and relevant involvement across all customer touch points, such as Web or other communications methods.