Xperi Holding Corp
New Issuer: Xperi Holding Corp. Partially Pays Down, Refinances Term Loan B Facility
Wed 07/28/2021 15:37 PM
Relevant Items:
Xperi Covenants Tear Sheet, Debt Documents Overview
Xperi Debt Documents
To view the relevant documents above as well as our Americas Covenants team's coverage of thousands of other stressed/distressed debt situations including the Xperi Holding Corp term loan request a trial here: https://reorg.com/trial
Xperi Holding Corp. is a San Jose, Calif.-based intellectual property licensing platform with a portfolio of media and semiconductor IP, patents and patent applications throughout the world. On June 1, 2020, Xperi Corp. merged with TiVo Corp. in a “merger-of-equals” all-stock transaction. Xperi Holding Corp. became the parent company of both Xperi Corp. and TiVo Corp.
In connection with the merger, Xperi Holding Corp. borrowed $1.05 billion via a term loan B facility on June 1, 2020. As of March 31, 2021, there was $860.6 million outstanding. On June 8, the term loan B facility was partially prepaid using $50.6 million cash on hand and the remaining $810 million was refinanced with a new term loan B tranche under the same credit agreement executed via Amendment No. 1.
The term loan is guaranteed by Xperi Corp., TiVo Corp. and Xperi Holding Corp.’s material wholly owned domestic subsidiaries and is secured by substantially all assets of the loan parties. The term loan B does not contain a financial maintenance covenant, although it does contain typical covenants such as debt, liens, restricted payments, investments and prepayments.
In addition, as part of the merger Xperi Holding Corp. assumed $48,000 in convertible notes due October 2021 from TiVo Corp.
The company’s capital structure as of March 31, taking into account the prepayment and refinancing of the term loan B facility, is as follows:
--Richard Barbour II
Xperi Covenants Tear Sheet, Debt Documents Overview
Xperi Debt Documents
To view the relevant documents above as well as our Americas Covenants team's coverage of thousands of other stressed/distressed debt situations including the Xperi Holding Corp term loan request a trial here: https://reorg.com/trial
Xperi Holding Corp. is a San Jose, Calif.-based intellectual property licensing platform with a portfolio of media and semiconductor IP, patents and patent applications throughout the world. On June 1, 2020, Xperi Corp. merged with TiVo Corp. in a “merger-of-equals” all-stock transaction. Xperi Holding Corp. became the parent company of both Xperi Corp. and TiVo Corp.
In connection with the merger, Xperi Holding Corp. borrowed $1.05 billion via a term loan B facility on June 1, 2020. As of March 31, 2021, there was $860.6 million outstanding. On June 8, the term loan B facility was partially prepaid using $50.6 million cash on hand and the remaining $810 million was refinanced with a new term loan B tranche under the same credit agreement executed via Amendment No. 1.
The term loan is guaranteed by Xperi Corp., TiVo Corp. and Xperi Holding Corp.’s material wholly owned domestic subsidiaries and is secured by substantially all assets of the loan parties. The term loan B does not contain a financial maintenance covenant, although it does contain typical covenants such as debt, liens, restricted payments, investments and prepayments.
In addition, as part of the merger Xperi Holding Corp. assumed $48,000 in convertible notes due October 2021 from TiVo Corp.
The company’s capital structure as of March 31, taking into account the prepayment and refinancing of the term loan B facility, is as follows:
Covenant Conclusions
- Liquidity and financial covenant - With no revolver, liquidity consists of cash on hand. After accounting for the voluntary prepayment of the term loan B facility as part of the refinancing transaction, we estimate that Xperi has approximately $84 million in cash. The term loan B does not contain a financial maintenance covenant.
- Debt and liens - We estimate the pro forma capacity for additional pari debt to be approximately $683 million as permitted by the incremental debt, general debt and general liens baskets. Alternatively, there is capacity to incur $1.3 billion in junior or unsecured debt using the ratio debt and general debt baskets. In addition, Xperi can incur a further $25 million in structurally senior debt at foreign subsidiaries.
- Restricted payments, investments and prepayments - Xperi can make an unlimited amount of restricted payments, investments and prepayments subject to a 3x net leverage ratio. As of March 31, on a pro forma basis for the June 8 refinancing transaction, the net leverage ratio was 1.48x. Furthermore, starting Dec. 31, Xperi will have access to an “Available Amount” builder basket based on retained excess cash flow not used in mandatory prepayments.
--Richard Barbour II
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