GTT COMMUNICATIONS,INC. (NYSE:GTT) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive
Agreement
On December22, 2016, GTT Escrow Corporation (Escrow Corp), a
newly formed, wholly owned subsidiary of GTT Communications,Inc.
(GTT), closed its previously announced offering of $300 million
aggregate principal amount of 7.875% Senior Notes due 2024 (the
Notes). The Notes were offered and sold only to qualified
institutional buyers to Rule144A under the Securities Act of
1933, as amended (the Securities Act), and to non-U.S. buyers in
accordance with Regulation S under the Securities Act. The Notes
have not been and are not expected to be registered under the
Securities Act or under any state securities laws and, unless so
registered, may not be offered or sold in the United States or to
U.S. persons except to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act
and applicable state securities laws.
GTT intends to use the net proceeds from the Notes offering,
together with initial borrowings under the new credit agreement
described below, to finance its previously announced acquisition
of Hibernia Networks (Hibernia), to repay certain existing
indebtedness, to pay various fees and expenses incurred in
connection with the Hibernia acquisition and related financing
transactions, and for general corporate purposes. The proceeds
from the Notes offering will be held in, and secured by a lien
on, an escrow account with Wilmington Trust, National
Association, as escrow agent, pending consummation of the
Hibernia acquisition.
The Notes were issued to an indenture, dated as of December22,
2016 between Escrow Corp and Wilmington Trust, National
Association, as trustee (the Indenture). The Indenture provides
that if the conditions to the release of the offering proceeds
from escrow (which include the consummation of the Hibernia
acquisition) are not satisfied on or before May5, 2017, GTT
determines that the Hibernia acquisition will not be completed on
or before such date or the Hibernia acquisition agreement is
terminated, the Notes will be subject to a special mandatory
redemption at a price of 50% of the aggregate principal amount of
the Notes, plus accrued and unpaid interest to, but not
including, the date of redemption.
If the Hibernia acquisition is consummated, it is expected that
on the date of such acquisition and contemporaneously with the
release from escrow of the proceeds from the Notes offering,
(i)Escrow Corp will merge with and into GTT, with GTT continuing
as the surviving corporation and GTT assuming by operation of law
Escrow Corps obligations under the Indenture, (ii)GTT and certain
of its subsidiaries (the Guarantors) will enter into a
supplemental indenture (the Supplemental Indenture) to the
Indenture to which (x)GTT will assume the rights and obligations
of Escrow Corp under the Indenture and the Notes and (y)the
obligations of GTT under the Indenture and the Notes, including
the due and punctual payment of interest on the Notes, will be
fully and unconditionally guaranteed, jointly and severally, on a
senior unsecured basis by the Guarantors. The subsidiaries of GTT
that are expected to guarantee the Notes are also expected to
guarantee GTTs proposed $775.0 million credit agreement, which is
also expected to close contemporaneously with the closing of the
Hibernia acquisition.
The Notes will mature on December31, 2024, and interest is
payable on the Notes semiannually in arrears on June30 and
December31 of each year, commencing on June30, 2017.
In addition to the special mandatory redemption described above,
GTT may, at its option, redeem the Notes, in whole at any time,
or in part from time to time, prior to December31, 2019 at a
price equal to 50% of the principal amount of the Notes to be
redeemed plus a make-whole premium, plus accrued and unpaid
interest, if any, to, but not including, the redemption date. GTT
may, at its option, redeem the Notes in whole at any time, or in
part from time to time, on or after December31, 2019 at certain
specified redemption prices, plus accrued and unpaid interest, if
any, to, but not including, the redemption date. In addition, GTT
may, at its option, redeem up to 40% of the aggregate principal
amount of the Notes at any time and from time to time prior to
December31, 2019 with the net proceeds of certain equity
offerings at a price of 107.875% of the aggregate principal
amount thereof, plus accrued and unpaid interest, if any, to, but
not including, the redemption date.
The Indenture contains covenants that, from and after the date of
the Hibernia acquisition, will limit the ability of GTT and
certain of its subsidiaries to, among other things and subject to
certain significant exceptions: (i)incur, assume or guarantee
additional indebtedness; (ii)declare or pay dividends or make
other distributions with respect to, or purchase or otherwise
acquire or retire for value, equity interests; (iii)make any
principal payment on, or
redeem or repurchase, subordinated debt; (iv)make loans,
advances or other investments; (v)incur liens that secure
indebtedness; (vi)sell or otherwise dispose of assets,
including capital stock of subsidiaries; (vii)consolidate or
merge with or into, or sell all or substantially all assets to,
another person; (viii)enter into sale and leaseback
transactions and (ix)enter into transactions with affiliates.
If any of certain change of control events occurs, GTT is
required to offer to purchase the Notes at a price of 101% of
the aggregate principal amount thereof, plus accrued and unpaid
interest, if any, to, but not including, the purchase date. The
Indenture also provides for certain events of default, which,
if any of them occurs, would permit or require the principal,
premium, if any, interest and any other monetary obligations on
all the then outstanding Notes to be declared immediately due
and payable.
The foregoing description of the Indenture is not intended to
be complete and is qualified in its entirety by reference to
the Indenture, a copy of which is attached hereto as
Exhibit4.1, and 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 set forth under Item 1.01 above is incorporated
by reference into this Item 2.03.
Caution Regarding Forward-Looking Statements
The disclosure above contains certain forward-looking
statements within the meaning of Section27A of the Securities
Act and Section21E of the Securities Exchange Act of 1934, as
amended, including those regarding the Hibernia acquisition,
the anticipated use of proceeds from the Notes offering and
GTTs proposed credit agreement. There can be no assurance that
the Hibernia acquisition or the proposed credit agreement will
be consummated. Actual events or results may differ materially
from those in the forward-looking statements as a result of
various important factors, including those described in GTTs
filings with the Securities and Exchange Commission. Although
GTT believes that the expectations reflected in the
forward-looking statements are reasonable, such statements
should not be regarded as a representation by GTT, or any other
person, that such forward-looking statements will be achieved.
The business and operations of GTT are subject to substantial
risks which increase the uncertainty inherent in
forward-looking statements. GTT undertakes no duty to update
any of the forward-looking statements, whether as a result of
new information, future events or otherwise. In light of the
foregoing, readers are cautioned not to place undue reliance on
such forward-looking statements.
Item 9.01 Financial Statements and Exhibits.
(d)Exhibits
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ExhibitNo. |
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Description |
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4.1 |
Indenture, dated as of December22, 2016, by and between |
About GTT COMMUNICATIONS, INC. (NYSE:GTT)
GTT Communications, Inc. is a provider of cloud networking services. The Company offers a portfolio of global communications services, including EtherCloud wide area network services; Internet services; managed network and security services, and voice and unified communication services. The Company provides Layer 2 (Ethernet) and Layer 3 (multiprotocol label switching (MPLS)) solutions to meet the needs of multinational clients. The Company offers customers high-bandwidth global Internet connectivity and IP transit with availability and packet delivery. It offers managed network services, including managed equipment, managed security services and managed secure access. Its Tier 1 Internet protocol (IP) network delivers connectivity for its clients around the world. It provides services to multinational enterprises, carriers and government customers in over 100 countries. The Company’s global network assets are deployed in North America, South America, Europe, Asia and Australia. GTT COMMUNICATIONS, INC. (NYSE:GTT) Recent Trading Information
GTT COMMUNICATIONS, INC. (NYSE:GTT) closed its last trading session down -0.50 at 27.90 with 121,109 shares trading hands.
