Debt Commitment Letter
In connection with the Merger, Merger Sub, a wholly owned subsidiary of WMIH, entered into a financing commitment letter (the “Commitment Letter”) with Credit Suisse AG, Credit Suisse Securities (USA) LLC, Jefferies Finance LLC, Deutsche Bank AG Cayman Islands Branch, Deutsche Bank Securities Inc., HSBC Bank USA, National Association and HSBC Securities (USA) Inc. for a one-year senior unsecured term loan bridge facility of up to $2.75 billion (the “Bridge Facility”), which, if funded, is convertible on the first anniversary of the funding date thereof (the “Conversion Date”) into (i) a $1.0 billion tranche of five-year term loans, (ii) a $1.0 billion tranche of eight-year term loans and (iii) a $750.0 million of ten-year term loans. Subject to certain terms and conditions set forth in the Commitment Letter, on the Conversion Date and on the 15th calendar day of each month thereafter, at the option of the applicable lender, the term loans may be exchanged in whole or in part for senior unsecured exchange notes having an aggregate principal amount of at least $250.0 million (or the remaining amount of such tranche of term loans, if lesser).
The funding of the Bridge Facility is subject to Merger Sub’s compliance with customary terms and conditions precedent as set forth in the Commitment Letter, including, among others, (i) the execution and delivery by Merger Sub of definitive documentation consistent with the Commitment Letter and (ii) that the Merger shall have been, or substantially simultaneously with the funding under the Bridge Facility shall be, consummated in accordance with the terms of the Merger Agreement without giving effect to any amendments or waivers that are material and adverse to the parties to the Commitment Letter.
The aggregate proceeds of the debt financing, together with the available cash of WMIH and Merger Sub, will be sufficient for WMIH and Merger Sub to pay the aggregate cash component of the Merger Consideration and pay all related fees and expenses payable in connection with the Merger.
The foregoing is a summary only and does not purport to be a complete description of all of the terms and provisions contained in the Commitment Letter, and is subject to and qualified in its entirety by reference to the Commitment Letter attached hereto as Exhibit 10.5, which is incorporated by reference into this Item 1.01.
Item 8.01 Other Events.
On February 12, 2018, WMIH entered into a fee letter with KKR Capital Markets LLC (“KCM”) for its engagement as a placement agent in connection with the Bridge Financing, and, pursuant to the terms of the fee letter, WMIH will pay KCM a fee of 0.25% of the aggregate amount of the aggregate commitments under the Bridge Facility upon its initial funding. WMIH also entered into an engagement letter with KCM as a financial advisor with respect to the Merger and, pursuant to the terms of the engagement letter, WMIH will pay KCM a fee of $25 million upon the closing of the Merger.
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