HEWLETT PACKARD ENTERPRISE COMPANY (NYSE:HPE) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.
The information described below under Item 2.03. Creation of a
Direct Financial Obligation under an Off-Balance Sheet
Arrangement of a Registrant is hereby incorporated by reference
into this Item 1.01.
Direct Financial Obligation under an Off-Balance Sheet
Arrangement of a Registrant is hereby incorporated by reference
into this Item 1.01.
Item 2.03. Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
On May 24, 2016, the Company announced plans for a tax-free
spin-off and merger of its Enterprise Services business
(“Everett”) with Computer Sciences Corporation (“CSC”) (such
spin-off, the Spin Transaction; such merger, the Merger; and
collectively, the “Everett Transactions”), which will create a
pure-play, global IT services company.
spin-off and merger of its Enterprise Services business
(“Everett”) with Computer Sciences Corporation (“CSC”) (such
spin-off, the Spin Transaction; such merger, the Merger; and
collectively, the “Everett Transactions”), which will create a
pure-play, global IT services company.
As contemplated by the Everett Transactions, on December 16,
2016, Everett SpinCo, Inc. (the Borrower), a wholly owned
subsidiary of Hewlett Packard Enterprise Company (the Company),
entered into a term loan agreement (the Term Loan Agreement),
together with the lenders named therein, the arrangers named
therein (the Arrangers) and The Bank of Tokyo-Mitsubishi UFJ,
Ltd. (BTMU), as administrative agent, providing for a senior
unsecured delayed draw, term loan facility in the aggregate
principal amount of the U.S. dollar equivalent of $2,000,000,000
(the Term Loan). The lenders have committed to provide (i)
Tranche A-1 Term Loans in U.S. dollars in an aggregate amount of
$375,000,000 (the Tranche A-1 Loans), (ii) Tranche A-2 Term Loans
in U.S. dollars in an aggregate amount of $1,310,000,000 (the
Tranche A-2 Loans) and (iii) Tranche A-3 Term Loans in Euros in
an aggregate amount of $315,000,000 (the Tranche A-3 Loans).
2016, Everett SpinCo, Inc. (the Borrower), a wholly owned
subsidiary of Hewlett Packard Enterprise Company (the Company),
entered into a term loan agreement (the Term Loan Agreement),
together with the lenders named therein, the arrangers named
therein (the Arrangers) and The Bank of Tokyo-Mitsubishi UFJ,
Ltd. (BTMU), as administrative agent, providing for a senior
unsecured delayed draw, term loan facility in the aggregate
principal amount of the U.S. dollar equivalent of $2,000,000,000
(the Term Loan). The lenders have committed to provide (i)
Tranche A-1 Term Loans in U.S. dollars in an aggregate amount of
$375,000,000 (the Tranche A-1 Loans), (ii) Tranche A-2 Term Loans
in U.S. dollars in an aggregate amount of $1,310,000,000 (the
Tranche A-2 Loans) and (iii) Tranche A-3 Term Loans in Euros in
an aggregate amount of $315,000,000 (the Tranche A-3 Loans).
The Term Loan, when funded, may be used for general corporate
purposes, including to pay expenses associated with the Everett
Transactions and the payment of a special dividend by the
Borrower to the Company in connection with the Spin Transaction.
The funding date of the Term Loan (the Funding Date) is
conditioned, among other things, on the satisfaction or waiver of
the conditions to consummation of the Merger (other than the
consummation of the Spin Transaction).
purposes, including to pay expenses associated with the Everett
Transactions and the payment of a special dividend by the
Borrower to the Company in connection with the Spin Transaction.
The funding date of the Term Loan (the Funding Date) is
conditioned, among other things, on the satisfaction or waiver of
the conditions to consummation of the Merger (other than the
consummation of the Spin Transaction).
Commitments under the Term Loan will be available until August 1,
2017, unless such date is extended to September 30, 2017, at the
election of the Arrangers.
2017, unless such date is extended to September 30, 2017, at the
election of the Arrangers.
Borrowings under the Term Loan will bear interest at rates per
annum, determined, at the Borrowers option, by reference either
to an alternate base rate (ABR Borrowing) or to LIBOR (Eurodollar
Borrowing).
annum, determined, at the Borrowers option, by reference either
to an alternate base rate (ABR Borrowing) or to LIBOR (Eurodollar
Borrowing).
With respect to Tranche A-1 Loans, ABR Borrowings will bear
interest at (a) the highest of (i) the prime rate announced by
BTMU, (ii) the Federal Funds Effective Rate plus one-half of 1%,
and (iii) one-month LIBOR plus 1% (the Alternative Base Rate),
plus (b) a margin of between zero and 62.5 basis points.
Eurodollar Borrowings will bear interest at (a) the London
interbank offered rate for deposits in dollars with a term
equivalent to the interest period for such borrowing (LIBOR) plus
(b) a margin of between 87.5 and 162.5 basis points.
interest at (a) the highest of (i) the prime rate announced by
BTMU, (ii) the Federal Funds Effective Rate plus one-half of 1%,
and (iii) one-month LIBOR plus 1% (the Alternative Base Rate),
plus (b) a margin of between zero and 62.5 basis points.
Eurodollar Borrowings will bear interest at (a) the London
interbank offered rate for deposits in dollars with a term
equivalent to the interest period for such borrowing (LIBOR) plus
(b) a margin of between 87.5 and 162.5 basis points.
With respect to Tranche A-2 Loans, ABR Borrowings will bear
interest at (a) the Alternative Base Rate, plus (b) a margin of
between zero and 75.0 basis points. Eurodollar Borrowings will
bear interest at (a) LIBOR plus (b) a margin of between 100 and
175 basis points.
interest at (a) the Alternative Base Rate, plus (b) a margin of
between zero and 75.0 basis points. Eurodollar Borrowings will
bear interest at (a) LIBOR plus (b) a margin of between 100 and
175 basis points.
With respect to Tranche A-3 Loans, Eurodollar Borrowings will
bear interest at (a) LIBOR plus (b) a margin of between 75 and
135 basis points.
bear interest at (a) LIBOR plus (b) a margin of between 75 and
135 basis points.
The Term Loan Agreement contains customary representations and
warranties and customary affirmative, negative and financial
covenants. Other than certain customary financial reporting
obligations, all of the affirmative, negative and financial
covenants will not apply until the occurrence of the Funding
Date. Such covenants contain, among other things, limitations on
the Borrower and its subsidiaries incurring liens and entering
into certain types of
warranties and customary affirmative, negative and financial
covenants. Other than certain customary financial reporting
obligations, all of the affirmative, negative and financial
covenants will not apply until the occurrence of the Funding
Date. Such covenants contain, among other things, limitations on
the Borrower and its subsidiaries incurring liens and entering
into certain types of
fundamental change transactions. Under the financial covenant,
commencing with the end of the first fiscal quarter after the
Funding Date, the Borrower may not (i) permit the ratio of its
consolidated EBITDA to its consolidated interest expense to be
less than 3.0 to 1 for any period of four consecutive fiscal
quarters and (ii) permit the ratio of its consolidated total debt
to consolidated EBITDA to be greater than 3.0 to 1 as of the last
day of any such fiscal quarter.
commencing with the end of the first fiscal quarter after the
Funding Date, the Borrower may not (i) permit the ratio of its
consolidated EBITDA to its consolidated interest expense to be
less than 3.0 to 1 for any period of four consecutive fiscal
quarters and (ii) permit the ratio of its consolidated total debt
to consolidated EBITDA to be greater than 3.0 to 1 as of the last
day of any such fiscal quarter.
The Term Loan Agreement includes customary events of default,
including events of default relating to non-payment of amounts
due under the Term Loan, material inaccuracy of representations
and warranties, violation of covenants, non-payment or
acceleration of other material indebtedness, bankruptcy and
insolvency, unsatisfied material judgments, change of control,
certain ERISA events and actual or asserted invalidity of any
guarantee by CSC during any guarantee effectiveness period. If an
event of default occurs under the Term Loan Agreement, the
lenders will be able to terminate the commitments and accelerate
the maturity of the Term Loan and exercise other rights and
remedies.
including events of default relating to non-payment of amounts
due under the Term Loan, material inaccuracy of representations
and warranties, violation of covenants, non-payment or
acceleration of other material indebtedness, bankruptcy and
insolvency, unsatisfied material judgments, change of control,
certain ERISA events and actual or asserted invalidity of any
guarantee by CSC during any guarantee effectiveness period. If an
event of default occurs under the Term Loan Agreement, the
lenders will be able to terminate the commitments and accelerate
the maturity of the Term Loan and exercise other rights and
remedies.
The foregoing description is qualified by reference to the full
text of the Term Loan Agreement, which is filed here as Exhibit
10.1.
text of the Term Loan Agreement, which is filed here as Exhibit
10.1.
In the ordinary course of their respective financial services
businesses, the lenders party to the Term Loan, or their
respective affiliates, have provided, and may in the future
provide to the Company, and persons and entities with
relationships with Company, a variety of services, including cash
management, investment research and management, commercial
banking, hedging, brokerage, and advisory or other financial and
non-financial activities and services, for which they received or
will receive customary fees and expenses.
businesses, the lenders party to the Term Loan, or their
respective affiliates, have provided, and may in the future
provide to the Company, and persons and entities with
relationships with Company, a variety of services, including cash
management, investment research and management, commercial
banking, hedging, brokerage, and advisory or other financial and
non-financial activities and services, for which they received or
will receive customary fees and expenses.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit No.
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Description
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10.1
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Term Loan Agreement, dated as of December 16, 2016, by
and among Everett SpinCo, Inc., the lenders and arrangers party thereto and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as administrative agent. |
About HEWLETT PACKARD ENTERPRISE COMPANY (NYSE:HPE)
Hewlett Packard Enterprise Company is a provider of technology solutions. The Company operates through five segments: Enterprise Group, Software, Enterprise Services, Financial Services and Corporate Investments. The Enterprise Group segment provides its customers with the technology infrastructure they need to optimize traditional information technology (IT). The Software segment allows its customers to automate IT operations to simplify, accelerate and secure business processes and drives the analytics that turn raw data into actionable knowledge. The Enterprise Services segment brings all of its solutions together through its consulting and support professionals. The Financial Services segment enables flexible IT consumption models, financial architectures and customized investment solutions for its customers. The Corporate Investments segment includes Hewlett Packard Labs and certain business incubation projects, among others. HEWLETT PACKARD ENTERPRISE COMPANY (NYSE:HPE) Recent Trading Information
HEWLETT PACKARD ENTERPRISE COMPANY (NYSE:HPE) closed its last trading session up +0.06 at 23.82 with 5,885,400 shares trading hands.
