Item 1.01. Entry into a Material Definitive Agreement.
On July 8, 2024, Tripadvisor, Inc., a Delaware corporation (“Tripadvisor”), Tripadvisor Holdings, LLC, a Massachusetts limited liability company (“Holdings”), and Tripadvisor LLC, a Delaware limited liability company, entered into the First Amendment (the “Amendment”) by and among Tripadvisor, Holdings, Tripadvisor LLC, the other Loan Parties party thereto, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent, which amends the Credit Agreement, dated as of June 26, 2015, as amended and restated as of June 29, 2023 (such amended and restated credit agreement, the “Restated Credit Agreement”, and as amended by the First Amendment, the “Amended Credit Agreement”). The Amendment provides for a new $500.0 million term loan B credit facility maturing July 8, 2031, with an interest rate based on SOFR plus 2.75% (the “Term Loan B Facility”). The proceeds from the Term Loan B Facility will be used to redeem all $500.0 million aggregate principal amount of Tripadvisor’s outstanding 7.000% Senior Notes due 2025. Any terms not otherwise defined herein shall have the meaning ascribed to it in the Amended Credit Agreement.
The Amended Credit Agreement includes terms similar to those under the Restated Credit Agreement subject to certain changes and, among other things:
| ● | Implements the Term Loan B Facility; |
| ● | Makes certain adjustments to the definition of “Consolidated EBITDA”; |
| ● | Increases the Available Amount by the portion of excess cash flow and asset sale, casualty and condemnation mandatory prepayments declined by lenders under the Term Loan B Facility, which may be used to make restricted payments and investments; |
| ● | Adds a separate dollar basket not to exceed the greater of $195 million and 50% of Consolidated EBITDA for capital leases and purchase money debt; |
| ● | Adds a separate “ratio debt” basket for additional indebtedness up to 3.5 times pro forma Total Net Leverage Ratio, subject to certain customary limitations; and |
| ● | Adds customary extension and modification and refinancing facility provisions. |
The Amended Credit Agreement includes certain customary restrictions on the ability of Tripadvisor and its subsidiaries to, among other things, incur additional indebtedness, grant additional liens, and make investments, acquisitions, dispositions, distributions, and other payments, with certain exceptions as more specifically described in the Amended Credit Agreement. The Term Loan B Facility has no financial covenant.
The Amended Credit Agreement contains customary events of default and modifies the cross-default provision so that the Term Loan B Facility includes a customary cross-acceleration event of default with the revolving facility under the Amended Credit Agreement. If an event of default occurs and is continuing, then, among other things, the lenders may declare any outstanding obligations under the Amended Credit Agreement to be immediately due and payable and exercise their rights and remedies against the collateral. The obligations under the Amended Credit Agreement are secured by substantially all assets, whether personal, tangible or intangible, of Tripadvisor and the Subsidiary Loan Parties as granted under the Security Documents.
The foregoing description of the Amended Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment (included Amended Credit Agreement) filed as Exhibit 10.1 to Tripadvisor’s Current Report on Form 8-K (File No. 001-35362), filed with the Securities and Exchange Commission (the “SEC”) on July 8, 2024, and is incorporated herein by reference.
Certain of the agents and lenders under the Amended Credit Agreement, or their affiliates, have provided, and may in the future provide, certain commercial banking, financial advisory, and investment banking services in the ordinary course of business for Tripadvisor, its subsidiaries and certain of its affiliates, for which they receive customary fees and commissions.