UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

 

 

FORM 8-K

CURRENT REPORT

 

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

 

 

 

Date of Report (date of earliest event reported): June 23, 2016

 

 

 

LIBERTY INTERACTIVE CORPORATION

 

(Exact name of registrant as specified in its charter)

 

 

 

 

 

12300 Liberty Boulevard

Englewood, Colorado 80112

(Address of principal executive offices and zip code)

 

 

Registrant's telephone number, including area code: (720) 875-5300

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement

On June 23, 2016, QVC, Inc. (the “Company”), an indirect wholly owned subsidiary of Liberty Interactive Corporation, entered into a third amended and restated senior secured credit agreement with zulily, llc (“zulily”), a wholly owned subsidiary of Liberty Interactive Corporation, as Borrowers (collectively, the “Borrowers”), JPMorgan Chase Bank, N.A., as Administrative Agent, Lead Arranger and Lead Bookrunner, and the parties named therein as Lenders, Co-Bookrunners, Co-Syndication Agents and Co-Documentation Agents, which refinances the Company’s existing bank credit facility (the “Third Amended and Restated Credit Agreement”).

 

The Third Amended and Restated Credit Agreement is a multi-currency facility providing for a $2.65 billion revolving credit facility, with a $300 million total sub-limit for standby letters of credit and $1.5 billion of uncommitted incremental revolving loan commitments or incremental term loans. The Third Amended and Restated Credit Agreement includes a $400 million tranche that may be borrowed by the Company and zulily, as co-borrowers.  The remaining $2.25 billion and any incremental loans may be borrowed only by the Company.  The Third Amended and Restated Credit Agreement provides a table of interest rate margins that is the same as the previous bank credit facility. Borrowings under the Third Amended and Restated Credit Agreement bear interest at either the alternate base rate or LIBOR (based on an interest period selected by the applicable Borrower of one week, one month, two months, three months or six months, or to the extent available from all lenders, twelve months) at the applicable Borrower’s election in each case plus a margin. Borrowings that are alternate base rate loans will bear interest at a per annum rate equal to the base rate plus a margin that varies between 0.25% and 0.75% depending on the Borrowers’ combined ratio of consolidated total debt to consolidated EBITDA (the “consolidated leverage ratio”). Borrowings that are LIBOR loans will bear interest at a per annum rate equal to the applicable LIBOR plus a margin that varies between 1.25% and 1.75% depending on the Borrowers’ combined consolidated leverage ratio. Because the calculation of the consolidated leverage ratio was revised to include zulily, the effective interest rate margins, on the date that the Third Amended and Restated Credit Agreement was entered into, decreased from the interest rate margins under the previous bank credit facility.  Each loan may be prepaid at any time and from time to time without penalty other than customary breakage costs. No mandatory prepayments will be required other than when borrowings and letter of credit usage exceed availability; provided that, if zulily ceases to be controlled by Liberty Interactive Corporation, all of its loans must be repaid and its letters of credit cash collateralized. Any amounts prepaid on the revolving facility may be reborrowed.

 

The facility is scheduled to mature on June 23, 2021, except that $140 million of the $2.25 billion commitment available to the Company matures on March 9, 2020. Borrowings under the facility may be accelerated following certain customary events of default.

 

The payment and performance of the Borrowers’ obligations (including zulily’s obligations) under the Third Amended and Restated Credit Agreement will be guaranteed by each of the Company’s Material Domestic Subsidiaries (as defined in the Third Amended and Restated Credit Agreement). Further, the borrowings under the Third Amended and Restated Credit Agreement are secured, pari passu with the Company’s existing notes, by a pledge of all of the Company’s equity interests.  The payment and performance of the Borrowers’ obligations with respect to the $400 million tranche available to both the Company and zulily will also be guaranteed by each of zulily’s Material Domestic Subsidiaries, if any, and are secured by a pledge of all of zulily’s equity interests.

 

The Third Amended and Restated Credit Agreement contains certain affirmative and negative covenants, including certain restrictions on the Borrowers and each of their respective restricted subsidiaries (subject to certain exceptions) with respect to, among other things: incurring additional indebtedness; creating liens on property or assets; making certain loans or investments; selling or disposing of assets; paying certain dividends and other restricted payments; dissolving, consolidating or merging; entering into certain transactions with affiliates; entering into sale or leaseback transactions; restricting subsidiary distributions; and limiting the Company’s consolidated leverage ratio and the Borrowers’ combined consolidated leverage ratio.

 

Borrowings under the Third Amended and Restated Credit Agreement may be used to repay outstanding indebtedness, pay certain fees and expenses, finance working capital needs and general corporate purposes of the Borrowers and their respective subsidiaries and make certain restricted payments and loans to the Borrowers’ respective parents and affiliates.

 

The press release announcing the refinancing of the Company’s existing bank credit facility and the execution of the Third Amended and Restated Credit Agreement is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 2.03. The foregoing discussion of the terms of the Third Amended and Restated Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Third Amended and Restated Credit Agreement, which is filed as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 2.03.

 

Item 9.01. Financial Statements and Exhibits

(d)  Exhibits

 

 

   

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: June 27, 2016

 

 

 

 

 

 

 

 

 

 

EXHIBIT INDEX