HEMISPHERE MEDIA GROUP,INC. (NASDAQ:HMTV) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive
Agreement.
On February14, 2017 (the Closing Date), Hemisphere Media
Holdings, LLC (Holdings) and InterMedia Espaol,Inc. (together
with Holdings, the Borrowers), both wholly-owned indirect
subsidiaries of Hemisphere Media Group,Inc. (the Company), the
guarantors party thereto, the several lenders from time to time
party thereto, JPMorgan Chase Bank, N.A., as administrative agent
and collateral agent, JPMorgan Chase Bank, N.A., Deutsche Bank
Securities Inc. and Royal Bank of Canada as joint lead arrangers
and joint bookrunners, and CIT Capital Securities LLC as
documentation agent, entered into Amendment No.2 (Amendment No.2)
to that certain Credit Agreement, dated as of July30, 2013, among
the Borrowers, the guarantors party thereto, the several lenders
from time to time party thereto and the other parties named
therein (as amended by Amendment No.1, dated as of July31, 2014,
the Existing Credit Agreement, and as amended by Amendment No.2,
the Amended Credit Agreement).
The Amended Credit Agreement provides for term loans in the
aggregate principal amount of $213.3 million (the Amended Term
Loan Facility), which will mature on February14, 2024. The
Amended Term Loan Facility, issued with 0.5% of original issue
discount, will bear interest at the Borrowers option of either
(i)LIBOR (which will not be less than zero) plus a margin of
3.50% (decreased from a margin of 4.00% under the Existing Credit
Agreement) or (ii)or an Alternate Base Rate (ABR) plus a margin
of 2.50% (decreased from a margin of 3.00% under the Existing
Credit Agreement). There is no LIBOR floor (a decrease from a
LIBOR floor of 1.00% under the Existing Credit Agreement).
The Amended Term Loan Facility, among other terms, provides for
an uncommitted incremental loan option (the Incremental Facility)
allowing for increases for borrowings under the Amended Term Loan
Facility and borrowing of new tranches of term loans, up to an
aggregate principal amount equal to (i)$65.0 million (increased
from $40.0 million from the Existing Credit Agreement) plus
(ii)an additional amount (the Incremental Facility Increase)
provided, if after giving effect to such Incremental Facility
Increase (as well as any other additional term loans), on a pro
forma basis, the First Lien Net Leverage Ratio (as defined in the
Amended Credit Agreement) for the most recent four consecutive
fiscal quarters does not exceed 4.00:1.00 and the Total Net
Leverage Ratio (as defined in the Amended Credit Agreement) for
the most recent four consecutive fiscal quarters does not exceed
6.00:1.00. The First Lien Net Leverage Ratio and the Total Net
Leverage Ratio each caps the cash netted against debt up to a
maximum amount of $60.0 million (increased from $45.0 million
under the Existing Credit Agreement). Additionally, the Amended
Term Loan Facility also provides for an uncommitted incremental
revolving loan option (the Incremental Revolving Facility)
allowing for an aggregate principal amount of up to $30.0
million, which shall be secured on a pari passu basis by
the collateral securing the Amended Term Loan Facility.
The Amended Term Loan Facility will require the Borrowers to make
amortization payments (in quarterly installments) equal to 1.00%
per annum with respect to the Term Loan Facility with any
remaining amount due at final maturity. Voluntary prepayments
will be permitted, in whole or in part, subject to certain
minimum prepayment requirements; provided that any prepayments
made prior to the date that is six months from the Closing Date
of the Amended Term Loan Facility, for the purpose of repricing
or effectively repricing the Amended Term Loan Facility, will be
required to include a 1.00% prepayment premium.
The obligations under the Amended Term Loan Facility will be
guaranteed by HMTV, LLC, a direct wholly-owned subsidiary of the
Company (parent of Holdings) and all of Holdings existing and
future direct and indirect domestic subsidiaries (subject to
certain exceptions in the case of immaterial subsidiaries). The
Amended Term Loan Facility is secured by a first-priority
perfected security interest in substantially all of the assets of
HMTV, LLC, Holdings and Holdings restricted subsidiaries.
The Amended Term Loan Facility does not have any
maintenance-based financial covenants. Incurrence based financial
covenants include (i)a Total Net Leverage Ratio of 6.00:1.00,
determined on a pro forma basis after giving aggregate effect to
any Incremental Facility, new term loans or new incremental notes
that would apply and (ii)a First Lien Net Leverage Ratio of
4.00:1.00, determined on a pro forma basis after giving aggregate
affect to any Incremental Facility,Incremental Revolving
Facility, new term loans or new incremental notes first.
The lenders have the ability, subject to certain rights of the
Borrowers to cure periods, to accelerate loan payment dates and
charge default interest rates for certain breaches by the
Borrowers of their covenants and other obligations under the
Amended Term Loan Facility.
The foregoing description is not complete and is qualified in its
entirety by reference to the full text of the Amended Credit
Agreement, which is filed as Exhibit10.1 to this Current Report
on Form8-K, 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 disclosure set forth under Item 1.01 relating to the
Amended Term Loan Facility is incorporated by reference into
this Item 2.03.
Item 7.01. Regulation FD
Disclosure
On February14, 2017, the Company issued a press release
announcing the closing of the Amended Term Loan Facility. A
copy of the press release is attached hereto as Exhibit99.1 and
incorporated by reference herein.
The information included in Item 7.01 of this Current Report on
Form8-K, including Exhibit99.1 attached hereto, is furnished
solely to Item 7.01 of this Current Report on Form8-K.
Consequently, it is not deemed filed for the purposes of
Section18 of the Securities Exchange Act of 1934, as amended
(Exchange Act), or otherwise subject to the liabilities of that
section. It may only be incorporated by reference in another
filing under the Securities Act of 1933, as amended, or the
Exchange Act if such subsequent filing specifically references
this Current Report on Form8-K.
Item 9.01. Financial Statements and
Exhibits.
(d)Exhibits
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ExhibitNo. |
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DescriptionofExhibit |
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10.1 |
Amendment No.2 to the Credit Agreement, dated as of |
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99.1 |
Press Release issued by the Company on February14, 2017. |
SPECIAL NOTE REGARDING FORWARD LOOKING
STATEMENTS
Statements in this Current Report on Form8-K and oral
statements made from time to time by representatives of the
Company may contain certain statements about the Company and
its consolidated subsidiaries that are forward-looking
statements within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995. These include, but are not
limited to, statements relating to the Companys future
financial and operating results (including growth and
earnings), plans, objectives, expectations and intentions and
other statements that are not historical facts. These
statements are based on the current expectations of the
management of the Company and are subject to uncertainty and
changes in circumstance, which may cause actual results to
differ materially from those expressed or implied in such
forward-looking statements. Without limitation, statements
regarding the future effects of the amendment and any
statements preceded or followed by or that include the words
targets, plans, believes, expects, intends, will, likely, may,
anticipates, estimates, projects, should, would, expect,
positioned, strategy, future, potential, forecast, or words,
phrases or terms of similar substance or the negative thereof,
are forward-looking statements. These statements are based on a
number of assumptions that are subject to change. Factors that
could cause actual results to differ materially from those
expressed or implied by the forward-looking statements are
discussed under the heading Risk Factors and Forward-Looking
Statements in the Companys most recent annual report on
Form10-K filed with the Securities and Exchange Commission
(SEC), as they may be updated in any future reports filed with
the SEC. If one or more of these factors materialize, or if any
underlying assumptions prove incorrect, the Companys actual
results, performance, or achievements may vary materially from
any future results, performance or achievements expressed or
implied by these forward-looking statements. Forward-looking
statements included herein are made as of the date hereof, and
the Company undertakes no obligation to update publicly such
statements to reflect subsequent events or circumstances.
About HEMISPHERE MEDIA GROUP, INC. (NASDAQ:HMTV)
Hemisphere Media Group, Inc. is the United States Spanish-language media company. The Company serves the United States Hispanic and Latin American markets. It operates through Hemisphere segment. It owns and operates the Spanish language networks and content production platform, including movie and telenovela channels, over two Hispanic entertainment genres and the cable television networks. The Company’s networks include Cine Latino, Inc. (Cinelatino), Televicentro of Puerto Rico, LLC (WAPA), WAPA America, Inc. (WAPA America), HMTV Pasiones US, LLC and HMTV Pasiones LatAm, LLC (collectively, Pasiones), HMTV Centroamerica TV, LLC (Centroamerica TV) and HMTV TV Dominicana, LLC (Television Dominicana). WAPA is an independent broadcast television network. WAPA America is a Spanish-language cable television network. Cinelatino is the Spanish-language cable movie network. Pasiones focuses on the program genres among Hispanics, telenovelas. HEMISPHERE MEDIA GROUP, INC. (NASDAQ:HMTV) Recent Trading Information
HEMISPHERE MEDIA GROUP, INC. (NASDAQ:HMTV) closed its last trading session 00.00 at 11.50 with 8,970 shares trading hands.