APX Group, an indirect, wholly-owned subsidiary of Vivint Smart Home, refinanced its existing credit facilities with a $1.35 billion first lien senior secured term loan facility maturing in 2028 and a $370 million senior secured revolving credit facility maturing in 2026, with Bank of America as a lender, administrative agent and collateral agent.
APX Group also completed its offering of $800 million aggregate principal amount of 5.75% senior notes due 2029 in a private placement.
The refinancing transactions extended the weighted average maturities on Vivint’s outstanding indebtedness by approximately 3.5 years and are expected to reduce annual interest expense by approximately $50 million.
Borrowings under the new senior secured credit facilities will bear interest at either:
- The greater of_x000D_
- The U.S. “prime rate” as published in the Wall Street Journal
- The federal funds effective rate plus 0.5%
- One-month LIBOR plus 1% plus, in each case, a margin between 2.5% and 2%, depending on the first lien net leverage ratio of the applicable fiscal quarter
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- LIBOR plus a margin between 3.5% and 3%, depending on the first lien net leverage ratio of the applicable fiscal quarter.
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Vivint intends to use the net proceeds from the notes offering, together with the borrowings under the new senior secured credit facilities and cash on hand, to:
- Redeem all $677 million of its outstanding 7.875% senior secured notes due 2022
- Redeem all $400 million of its outstanding 7.625% senior notes due 2023
- Redeem all $225 million of its outstanding 8.5% senior secured notes due 2024
- Repay amounts outstanding and to terminate all commitments under its existing term loan and revolving credit facilities
- Pay the related redemption premiums and all fees and expenses related thereto.
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