TRAVELCENTERS OF AMERICA LLC (NASDAQ:TA) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.
On July 19, 2019, TravelCenters of America LLC, or TA, and certain of our subsidiaries, as borrowers or guarantors, entered into an amendment, or the Amendment, to our amended and restated loan and security agreement, or the Credit Facility, dated October 25, 2011, with Wells Fargo Capital Finance, LLC, as Agent, or Wells Fargo, and the lenders from time to time party thereto. The Amendment amended the Credit Facility to, among other things: (i) extend the maturity of the Credit Facility from December 19, 2019 to July 19, 2024; (ii) reduce the applicable margins on borrowings and standby letter of credit fees by 25 basis points and on commercial letter of credit fees by 12.5 basis points; (iii) make certain adjustments to the limitations on investments, dividends and stock repurchases under the Credit Facility in a manner favorable to us; (iv) reduce the sublimit for issuance of letters of credit under the Credit Facility from $170 million to $125 million; and (v) make certain adjustments to the borrowing base calculation in a manner we believe favorable to us.
As of July 19, 2019, the applicable margin was 1.25% for LIBOR borrowings and standby letter of credit fees, 0.25% for base rate borrowings and 0.625% for commercial letter of credit fees, in each case, subject to adjustment based on facility availability, utilization and other matters. As of July 19, 2019, the unused line fee was 0.25% per annum, subject to adjustment according to the average daily principal amount of unused commitments under the Credit Facility.
The foregoing description of the Amendment is not complete and is subject to and qualified in its entirety by reference to the Amendment, a copy of which is attached as Exhibit 10.1 hereto and is incorporated herein by reference.
Information Regarding Certain Relationships
Wells Fargo and the other lenders party to the Credit Facility, as well as their affiliates, have engaged in, and may in the future engage in, investment banking, commercial banking, advisory and other commercial dealings in the ordinary course of business with us. They have received, and may in the future receive, customary fees and commissions for these engagements. In addition, Hospitality Properties Trust and certain other companies to which The RMR Group LLC or its subsidiaries provide management services are parties to agreements with affiliates of Wells Fargo that provide for the issuance of credit or other services.
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 in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 9.01. Exhibits.
(d) Exhibits
WARNING CONCERNING FORWARD LOOKING STATEMENTS
This Current Report on Form 8-K contains statements that constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Also, whenever TA uses words such as believe, expect, anticipate, intend, plan, estimate, will, may, and negatives or derivatives of these or similar expressions, TA is making forward looking statements. These forward looking statements are based upon TAs present intent, beliefs or expectations, but forward looking statements are not guaranteed to occur and may not occur. Actual results may differ materially from those contained in or implied by TAs forward looking statements as a result of various factors. For example:
· Continued availability of borrowings under TAs revolving credit facility is subject to limits based on TAs maintaining certain levels of qualifying collateral. Accordingly, the maximum amount available under the credit facility to borrow or for letters of credit may be less than $200 million.
· The premiums used to determine the interest rate payable on the Credit Facility and the facility fee payable on the Credit Facility are based on TAs (and its subsidiary) maintaining certain levels of qualifying collateral. Future changes in TAs qualifying collateral may cause the interest and fees it pays to increase.