Item 1.01 Entry into a Material Definitive Agreement.
On July 9, 2021, APX Group, Inc. (the "Issuer"), an indirect, wholly owned
subsidiary of Vivint Smart Home, Inc. (the "Company" or "Vivint"), issued
$800.0 million aggregate principal amount of 5.75% Senior Notes due 2029 (the
"Notes"), pursuant to an indenture, dated as of July 9, 2021 (the "Indenture"),
among the Issuer, the guarantors party thereto (the "Guarantors") and Wilmington
Trust, National Association, as trustee (the "Trustee") and collateral agent.
Concurrently with the Notes offering, the Issuer refinanced its existing credit
facilities with (i) a new $1,350.0 million first lien senior secured term loan
facility (the "New Term Loan Facility") and (ii) a new $370.0 million senior
secured revolving credit facility (the "New Revolving Credit Facility" and
together with the New Term Loan facility, the "New Senior Secured Credit
Facilities"), with the lenders party thereto and Bank of America, N.A. as a
lender, administrative agent and collateral agent. The Issuer is the borrower
under the New Senior Secured Credit Facilities (the "Borrower").
Vivint used the net proceeds from the Notes offering, together with the
borrowings under the New Senior Secured Credit Facilities and cash on hand, to
(i) redeem (the "2022 Notes Redemption") all of the Issuer's outstanding 7.875%
Senior Secured Notes due 2022 (the "2022 Notes"), (ii) redeem (the "2023 Notes
Redemption") all of the Issuer's outstanding 7.625% Senior Notes due 2023 (the
"2023 Notes"), (iii) redeem (the "2024 Notes Redemption" and together with the
2022 Notes Redemption and the 2023 Notes Redemption, the "Redemptions") all of
the Issuer's outstanding 8.50% Senior Secured Notes due 2024 (the "2024 Notes"
and together with the 2022 Notes and the 2023 Notes, the "Redeemed Notes"),
(iv) repay amounts outstanding, and to terminate all commitments, under its
existing revolving credit facility and term loan facility and (v) pay the
related redemption premiums and all fees and expenses related thereto. The
Issuer irrevocably deposited funds with the applicable trustee and/or paying
agent to effect the Redemptions and to satisfy and discharge all of the Issuer's
remaining obligations under the indentures governing each series of the Redeemed
Senior Notes due 2029
The following is a brief description of the terms of the Notes and the
Indenture. Capitalized terms used herein, but not defined herein, will have the
meanings given to them in the Indenture.
Interest on the Notes will be payable semi-annually in arrears on January 15 and
July 15 of each year, commencing on January 15, 2022. Interest on the Notes will
accrue from and including July 9, 2021. The Notes will mature on July 15, 2029.
The Notes and the guarantees thereof are the Issuer's and the Guarantors' senior
unsecured obligations and rank:
• equally in right of payment with all of the Issuer's and the Guarantors'
existing and future senior indebtedness;
• senior in right of payment to all of the Issuer's and the Guarantors'
future subordinated indebtedness and other obligations that are expressly
subordinated in right of payment to the Notes;
• effectively subordinated to all of the Issuer's and Guarantors' existing
and future secured indebtedness (including the New Senior Secured Credit
Facilities and the Issuer's existing secured notes due 2027) to the
extent of the value of the collateral securing such indebtedness; and
• structurally subordinated to all existing and future indebtedness claims
of holders of preferred stock and other liabilities of the Issuer's
subsidiaries that do not guarantee the notes.
The Notes are fully and unconditionally guaranteed, jointly and severally, on a
senior unsecured basis, by the Company, APX Group Holdings, Inc. ("Holdings"),
the direct parent of the Issuer and the direct, wholly owned subsidiary of the
Company, and each of the Issuer's existing restricted subsidiaries that
guarantee indebtedness under the Issuer's New Senior Secured Credit Facilities
and existing senior secured notes. The Issuer's existing and future foreign
subsidiaries are not expected to guarantee the Notes. These guarantees are
subject to release under specified circumstances.
The Issuer may, at its option, redeem at any time and from time to time prior to
July 15, 2024, some or all of the Notes at 100% of the principal amount thereof
plus accrued and unpaid interest to the redemption date plus the applicable
"make-whole premium." From and after July 15, 2024, the Issuer may, at its
option, redeem at any time and from time to time some or all of the Notes at the
applicable redemption prices listed in the Indenture. In addition, on or prior
to July 15, 2024, the Issuer may, at its option, at any time and from time to
time, redeem an aggregate principal amount of Notes not to exceed the amount of
the Net Cash Proceeds (as defined in the Indenture) received by the Issuer from
one or more Equity Offerings (as defined in the Indenture) or a capital
contribution to the Issuer made with the Net Cash Proceeds of one or more Equity
Offerings at a redemption price equal to (i) 105.750% of the aggregate principal
amount of the Notes redeemed, plus (ii) accrued and unpaid interest, if any, to
but excluding, the redemption date; provided that (1) the amount redeemed shall
not exceed 40% of the aggregate principal amount of the Notes issued under the
Indenture (including any additional Notes issued thereunder); (2) at least 50%
of the aggregate principal amount of the Notes originally issued under the
Indenture on the Issue Date remains outstanding immediately after the occurrence
of each such redemption (unless all Notes are redeemed or repurchased or to be
redeemed or repurchased substantially concurrently); and (3) each such
redemption occurs within 180 days of the date of closing of the applicable
Change of Control Offer
Upon the occurrence of specific kinds of change of control, if the Issuer does
not redeem the Notes, the holders of the Notes will have the right to require
the Issuer to repurchase some or all of the holders' Notes at 101% of their
principal amount, plus accrued and unpaid interest to the repurchase date.
The Indenture contains covenants that, among other things, limit the Issuer's
ability and the ability of certain of the Issuer's subsidiaries to:
• incur or guarantee additional debt or issue disqualified stock or
• pay dividends and make other distributions on, or redeem or repurchase,
• make certain investments;
• incur certain liens;
• enter into transactions with affiliates;
• merge or consolidate;
• enter into agreements that restrict the ability of restricted
subsidiaries to make dividends or other payments to the Issuer;
• designate restricted subsidiaries as unrestricted subsidiaries; and
. . .
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of the Registrant.
The information set forth in Item 1.01 is incorporated by reference into this
Item 8.01 Other Events.
On July 12, 2021, the Company issued a press release announcing that the Issuer
completed the refinancing transactions described in this report.
A copy of the press release is filed as Exhibit 99.1 hereto and is incorporated
herein by reference.
Item 9.01 Financial Statements and Exhibits.
10.1 Indenture, dated as of July 9, 2021, among the Issuer, the
guarantors party thereto and Wilmington Trust, National Association,
as trustee and collateral agent.
10.2 Amended and Restated Credit Agreement, dated as of July 9, 2021,
among the Borrower, Holdings, each lender from time to time party
thereto and Bank of America, N.A., as administrative agent.
99.1 Press release issued July 12, 2021.
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