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
- 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
- LIBOR plus a margin between 3.5% and 3%, depending on the first lien net leverage ratio of the applicable fiscal quarter.
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.