Item 1.01. Entry in a Material Definitive Agreement.
As previously announced, on May 27, 2019, Global Payments Inc., a Georgia corporation (the “Company”), entered into an
Agreement and Plan of Merger (the “Merger Agreement”) with Total System Services, Inc., a Georgia corporation (“TSYS”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth
therein, TSYS will merge with and into the Company (the “Merger”), with Global Payments as the surviving entity in the Merger.
In connection with entry into the Merger Agreement, the Company entered into certain commitment letters (the “Commitment
Letters”) dated May 27, 2019, with Bank of America, N.A. (“Bank of America”) and certain other banks party thereto (the “Banks”), pursuant to which the Banks committed to, among other things, provide a
bridge facility in an aggregate amount equal to $2.75 billion (the “Bridge Facility”), subject to the terms and conditions set forth in the Commitment Letters.
On July 9, 2019, in connection with the Merger: (1) the Company, as borrower, entered into a Term Loan Credit Agreement (the
“Term Loan Credit Agreement”) and (2) the Company, together with certain wholly owned subsidiaries of the Company (the “Subsidiary Borrowers”), as borrowers, entered into a Credit Agreement (the
“Revolving Credit Agreement” and, together with the Term Loan Credit Agreement, the “Agreements”), in each case with Bank of America, as administrative agent, and a syndicate of financial institutions, as lenders
(the “Lenders”) and other agents. Upon entry into the Agreements, the aggregate commitments under the Bridge Facility were reduced to approximately $2.1 billion.
The Term Loan Credit Agreement provides for a senior unsecured $2.0 billion term loan facility and the Company, at its discretion, has
the ability to seek to increase the term loan capacity by an additional $1.0 billion (the “Term Loan Facility”). The Revolving Credit Agreement provides for a senior unsecured $3.0 billion revolving credit facility (the
“Revolving Credit Facility”, together with the Term Loan Facility, the “Facilities”). The Term Loan Facility and the Revolving Credit Facility will be available for borrowing on the date on which the Merger becomes
effective (the “Merger Closing Date”). Borrowings on the Merger Closing Date related to the Merger will be subject to limited conditionality, as provided in more detail in the Agreements, and all other borrowings will be subject to
customary conditionality. The Term Loan Credit Agreement and the Revolving Credit Agreement mature on the fifth anniversary of the Merger Closing Date. The Company’s obligations under the Facilities are not guaranteed by any person. The Company
has provided a guarantee of any borrowings made by the Subsidiary Borrowers. Borrowings under the Facilities may be repaid prior to maturity without premium or penalty, subject to payment of certain customary expenses of Lenders and customary notice
provisions.
The Facilities are expected to replace the existing second Amended and Restated Credit Agreement dated as of July 31,
2015, as amended prior to the date hereof, in connection with the Merger. Lenders’ commitments under the Agreements will terminate on the date that is the earliest of the following: (i) if the Merger has not been consummated, the date on
which the Merger Agreement is terminated in accordance with its terms, (ii) the date of effectiveness of any written notice from the Company to Bank of America of its election to terminate the commitments thereunder and (iii) if the Merger
has not been consummated, 11:59 p.m. (New York City time) on the Termination Date (as defined in the Merger Agreement as in effect on May 27, 2019), as it may be extended in accordance with the terms of the Merger Agreement. Unless previously
terminated, the Lenders’ commitments under the Term Loan Facility will terminate upon the funding of the term loan on the Merger Closing Date.
Borrowings under the Term Loan Facility will be made in US dollars and borrowings under the Revolving Credit Facility will be available to be
made in US dollars, euros, sterling, Canadian dollars and, subject to certain conditions, certain other currencies at the option of the Company. Borrowings in US dollars and certain other LIBOR-quoted currencies will bear interest, at the
Company’s option, at a rate equal to either (1) the rate (adjusted for any statutory reserve requirements for eurocurrency liabilities) for eurodollar deposits in the London interbank market (“LIBOR”) (“eurodollar
loans”), (2) a floating rate of interest set forth on the applicable LIBOR screen page designated by the Bank of America (“LIBOR daily loans”) or (3) the highest of (a) the federal funds effective rate plus 0.5%, (b) the
rate of interest as publicly announced by Bank of America as its “prime rate” and (c) LIBOR plus 1.0% (“base rate loans”), in each case, plus the applicable margin. The applicable margin for borrowings under the Revolving
Credit Facility will range from 1.125% to 1.875% for eurodollar loans and LIBOR daily loans and from 0.125% to 0.875% for base rate loans depending on the Company’s credit rating.
The Agreements contain customary affirmative covenants and restrictive covenants, including, among others, financial covenants based on the
Company’s leverage and interest coverage ratios. Each of the Agreements includes customary events of default, the occurrence of which, following any applicable cure period, would permit the lenders to, among other things, declare the principal,
accrued interest and other obligations to be immediately due and payable.
The foregoing description of the Agreements is qualified in its
entirety by reference to the Term Loan Credit Agreement and the Revolving Credit Agreement, copies of which are attached as Exhibits 10.1 and 10.2, respectively, to this Current Report and incorporated herein by reference.
