Item 1.01 Entry into a Material Definitive Agreement.
On May 27, 2022, Cvent, Inc., as borrower (the “Borrower”), a wholly-owned subsidiary of Cvent Holding Corp., a Delaware corporation (the “Company”), entered into a new five-year $500 million senior secured revolving credit facility (the “Revolving Credit Facility”). The terms of the Revolving Credit Facility are set forth in the Credit Agreement, dated as of May 27, 2022, by and among the Borrower, Holdings (as defined below) and the other loan parties party thereto, the lenders party thereto, and PNC Bank, National Association, as administrative agent (the “New Credit Agreement”). The New Credit Agreement replaces the Borrower’s existing senior secured credit facility established pursuant to the Amended and Restated Credit Agreement, dated as of November 30, 2017, by and among the Borrower, Holdings and each of the other guarantors party thereto, the lenders from time to time party thereto and Goldman Sachs Bank USA, as administrative agent (as the same has been amended, modified or supplemented from time to time, the “Prior Credit Agreement”) which was terminated on May 27, 2022 upon the effectiveness of the New Credit Agreement. A portion of the Revolving Credit Facility, not to exceed $35 million, will be available for the issuance of letters of credit, and the Borrower will have the option to increase the Revolving Credit Facility or to incur incremental term loans, in each case, in an aggregate amount not to exceed: (i)(A) $150 million plus (B) the amount of any prepayment of the loans, to the extent accompanied by a corresponding permanent reduction in the amount of the Revolving Credit Facility then outstanding, plus (ii) an unlimited additional amount, subject to pro forma compliance with a total net leverage ratio of 3.50:1.00 (or, in certain limited circumstances, 4.00:1.00), plus (iii) certain specified issuance and other builder baskets set forth in the New Credit Agreement, in each case, pursuant to terms set forth in the New Credit Agreement.
At closing, the Borrower borrowed $265 million under the Revolving Credit Facility. The borrowings were used, together with cash on hand of the Borrower, to repay all outstanding obligations under the Prior Credit Agreement and to pay certain costs and fees associated with the closing of the New Credit Agreement.
Borrowings under the Revolving Credit Facility bear interest based on the following performance-based pricing grid:
|
|
|
Net Leverage Ratio |
SOFR Margin* |
Commitment Fee |
< 1.00x |
175.0 basis points |
20.0 basis points |
< 2.00x |
200.0 basis points |
25.0 basis points |
< 3.00x |
225.0 basis points |
30.0 basis points |
≥ 3.00x |
250.0 basis points |
35.0 basis points |
* Interest on secured overnight financing rate (“SOFR”) loans accrues at a rate per annum equal to the sum of (x) Adjusted Term SOFR (as defined in the New Credit Agreement) plus (y) the applicable SOFR Margin set forth above. Adjusted Term SOFR is subject to a 0.00% floor.
The Revolving Credit Facility includes a maximum total net leverage ratio covenant set at 4.00:1.00; provided that following the consummation of a qualified acquisition, the Borrower may elect to increase the total net leverage ratio to 4.50:1:00 for the fiscal quarter in which such qualified acquisition was consummated and for the next three consecutive fiscal quarters thereafter. Such step ups in connection with qualified acquisitions are limited to two times during the term of the Revolving Credit Facility.
All obligations under the New Credit Agreement are unconditionally guaranteed by Papay Holdco, LLC, the Borrower’s direct holding company (“Holdings”), and certain of its U.S. subsidiaries. The obligations under the New Credit Agreement are secured by a first priority security interest in substantially all assets of the Borrower and the guarantors.
The New Credit Agreement contains customary representations and warranties, affirmative and negative covenants and events of default. The affirmative and negative covenants limit the ability of Holdings, the Borrower and the Borrower’s restricted subsidiaries to, among other things: incur additional debt or issue preferred stock; create liens; create restrictions on the Borrower’s subsidiaries’ ability to make payments to the Borrower or its direct or indirect holding companies; pay dividends and make other distributions in respect of Holdings’, the Borrower’s and its restricted subsidiaries’ capital stock; redeem or repurchase Holdings’, the Borrower’s and its restricted subsidiaries’ capital stock or prepay subordinated indebtedness; make certain investments or certain other restricted payments; guarantee indebtedness; designate unrestricted subsidiaries; sell certain kinds of assets; enter into certain types of transactions with affiliates; and effect mergers or consolidations. These covenants are subject to certain exceptions and qualifications set forth in the New Credit Agreement.
If an Event of Default (as defined in the New Credit Agreement) occurs and is continuing, amounts outstanding under the New Credit Agreement may become or be declared immediately due and payable and the lending commitments under the New Credit Agreement may be terminated.
The foregoing summary of the New Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the New Credit Agreement, which is attached as Exhibit 10.1 hereto, and is incorporated herein by reference.