Item 5. Other Information
ITEM 5. OTHER INFORMATION
October 2020 Refinancing
On October 30, 2020, we entered into the 2020 Credit Facility with the lenders referred to therein (the “Lenders”), Bank of America, N.A., as Administrative Agent, Swingline Lender and an Issuing Lender, PNC Bank, National Association, as Syndication Agent, and Regions Bank, BBVA USA and Fifth Third Bank, National Association, as Co-Documentation Agents, with BofA Securities, Inc., PNC Bank, National Association, Regions Capital Markets, BBVA USA and Fifth Third Bank, National Association, as Joint Lead Arrangers and Joint Bookrunners.
The 2020 Credit Facility is a $900 million senior secured facility that matures on October 30, 2025, unless earlier terminated, subject to certain conditions and circumstances set forth in the 2020 Credit Facility. The 2020 Credit Facility replaces the 2017 Credit Facility by amending and restating it to include a $500 million revolving credit facility (the “Revolving Credit Facility”) and a $400 million term loan facility (the “Term Facility”). The Revolving Credit Facility includes (a) a $50 million sublimit available for the issuance of standby letters of credit, (b) a $50 million sublimit available for swingline loans, and (c) a $100 million sublimit available for multicurrency borrowings. We may prepay the 2020 Credit Facility in whole or in part at any time without premium or penalty, other than customary breakage costs with respect to certain types of loans.
Under the terms of the 2020 Credit Facility, we are entitled on one or more occasions, subject to the satisfaction of certain conditions, to request an increase in the commitments under the Revolving Credit Facility and/or request additional incremental term loans in the aggregate principal amount of up to $250 million plus an amount, if any, such that the net leverage ratio shall be no greater than 3.25 to 1.00.
On October 30, 2020, we borrowed $400 million pursuant to the Term Facility and used the proceeds to repay the outstanding principal balance of the term loan under the 2017 Credit Facility, and repay $124.4 million of outstanding revolving credit loans under the 2017 revolving credit facility.
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Our obligations under the 2020 Credit Facility are secured by the stock and limited liability company interests of certain of our direct subsidiaries and any of our material domestic subsidiaries, if any, and the proceeds therefrom pledged pursuant to an Amended and Restated Pledge Agreement dated as of October 30, 2020 (the “2020 Pledge Agreement”), by us in favor of Bank of America, N.A., as administrative agent, for the ratable benefit of itself and the secured parties referred to therein.
Dollar tranche loans under the Revolving Credit Facility and Term Facility loans bear interest at a rate per annum equal to (a) a base rate equal to the highest of (i) the prime rate announced by Bank of America, N.A., (ii) the Federal Funds Rate plus 0.50%, and (iii) the Eurocurrency Rate (which varies depending on the currency in which the loan is denominated) plus 1.00% (the “Base Rate”), plus (b) an applicable margin as specified in the 2020 Credit Facility (the “Applicable Margin”). Each Eurocurrency Rate Loan under the 2020 Credit Facility shall bear interest at a rate per annum equal to the Eurocurrency Rate, plus the Applicable Margin. The Applicable Margin shall be adjusted quarterly, varies based on our net leverage ratio and varies based on whether the loan is a Base Rate Loan (0.375% to 1.125%) or a Eurocurrency Rate Loan (1.375% to 2.125%). The 2020 Credit Facility also provides for a commitment fee of between 0.250% and 0.375% of the unused commitment under the Revolving Credit Facility, depending on our net leverage ratio.
The 2020 Credit Facility contains various representations, warranties and affirmative, negative and financial covenants customary for financings of this type. Financial covenants include a net leverage ratio and an interest coverage ratio.
Bank of America, N.A., the Lenders and other agents under the 2020 Credit Facility and the 2020 Pledge Agreement and their respective affiliates have in the past provided, and may in the future provide, investment banking, underwriting, lending, commercial banking, cash management services, interest rate swaps and other advisory services to us. These parties have received, and may in the future receive, customary compensation from us for such services.
The descriptions of the 2020 Credit Facility and the 2020 Pledge Agreement contained in this Part II, Item 5 of our Quarterly Report on Form 10-Q do not purport to be complete and is subject to, and qualified in their entirety by, the full and complete terms contained in the 2020 Credit Facility and 2020 Pledge Agreement, copies of which are filed as Exhibits 10.4 and 10.5, respectively, and are incorporated herein by reference. Any capitalized term used herein but not defined shall have the meaning ascribed to such term in the 2020 Credit Facility.
Third Quarter 2020 Form 10-Q
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ITEM 6. EXHIBITS
The exhibits listed below are filed or incorporated by reference as part of this Quarterly Report on Form 10-Q:
Filed In
Exhibit
Number
Description of Document Filed Herewith Form Exhibit Number Filing Date
10.1
First Amendment to Purchase and Sale Agreement, dated July 8, 2020, between HPBB1, LLC and BBHQ1, LLC.
X
10.2
Second Amendment to Purchase and Sale Agreement, dated July 21, 2020, between HPBB1, LLC and BBHQ1, LLC.
X
10.3
Eleventh Amendment to Lease Agreement, dated as of August 13, 2020, between BBHQ1, LLC and Blackbaud, Inc.
X
10.4
Amended and Restated Credit Agreement, dated as of October 30 , 2020, by and among Blackbaud, Inc., and certain of its subsidiaries, as Borrowers, the lenders referred to therein, Bank of America, N.A., as Administrative Agent, Swingline Lender and Issuing Lender, PNC Bank, National Association , as Syndication Agent, and Regions Bank, BBVA USA and Fifth Third Bank, National Association , as Co-Documentation Agents, with BofA Securities, Inc., PNC Bank, National Association, Re gions Capital Markets, BBVA USA and Fif th Third Bank, National Association as Joint Lead Arrangers and Joint Bookrunners .
X
10.5
Amended and Restated Pledge Agreement, dated as of October 30, 2020, by Blackbaud, Inc. in favor of Bank of America, N.A., as Administrative Agent, for the ratable benefit of itself and the secured parties referred to therein .
X
31.1
Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
X
31.2
Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
X
32.1
Certification by the Chief Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
X
32.2
Certification by the Chief Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
X
101.INS Inline XBRL Instance Document - the Instance Document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL Document. X
101.SCH Inline XBRL Taxonomy Extension Schema Document. X
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. X
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. X
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document. X
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. X
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). X
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Blackbaud, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
BLACKBAUD, INC.
Date: November 3, 2020 By: /s/ Michael P. Gianoni
Michael P. Gianoni
President and Chief Executive Officer
(Principal Executive Officer)
Date: November 3, 2020 By: /s/ Anthony W. Boor
Anthony W. Boor
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
Third Quarter 2020 Form 10-Q
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