NCR Atleos enters $500 million revolver, $835 million term loan A

By Marisa Wong

Los Angeles, Sept. 28 – NCR Atleos LLC entered into a credit agreement on Sept. 27 for a $500 million five-year multicurrency revolving credit facility and an $835 million five-year term loan A, according to an 8-K filing with the Securities and Exchange Commission.

The revolver includes an up to $75 million letter-of-credit sub-facility and an up to $200 million sub-facility for borrowings in foreign currencies.

The term A loans and the revolving loans will bear interest at SOFR plus an applicable margin ranging from 250 basis points to 350 bps, depending on the company’s consolidated leverage ratio.

The company will also pay a commitment fee on the daily unused portion of the revolver ranging from 25 bps to 50 bps, also based on the consolidated leverage ratio.

The outstanding principal balance of the term loan A is required to be repaid in quarterly installments beginning with the first full fiscal quarter after the spinoff closing date in an amount equal to 1.875% of the original principal amount of the term A loans during the first three years and 2.5% of the original principal amount during final two years. Any remaining outstanding balance will be due at maturity on the fifth anniversary of the closing date of NCR Atleos’ spinoff from NCR Corp.

The revolver is not subject to amortization and will mature on the fifth anniversary of the spinoff closing date.

Term loan B

The $2,085,000,000 credit agreement also includes a previously announced $750 million 5.5-year term loan B.

The term B loans bear interest at SOFR plus 475 bps.

The outstanding principal balance of the term loan B is required to be repaid in quarterly installments beginning with the first full fiscal quarter after the spinoff closing date in an amount equal to 0.35% of the original principal amount during the first year, 0.875% of the original principal amount during the second year, 1.75% of the original principal amount during the third and four years and 2.625% of the original principal amount after that. Any remaining outstanding balance will be due at maturity on the 5.5-year anniversary of the spinoff closing date.

More details

The credit agreement permits the company to request increases in any existing tranche of term A loans and term B loans, the establishment of new tranches of incremental term loans or the establishment of incremental revolving commitments, in an aggregate principal amount for all such incremental facilities of up to $300 million plus an amount that would not cause the company’s consolidated leverage ratio, calculated on a pro forma basis and assuming all incremental commitments were fully drawn, to exceed 3.50 to 1.00.

The credit agreement requires the company to prepay outstanding term A loans and term B loan with 50% (subject to reductions to 25% and 0% based on the company’s consolidated leverage ratio) of the company’s annual excess cash flow; 100% of the net cash proceeds of certain asset sales and casualty and condemnation events, subject to reinvestment rights and certain other exceptions; and 100% of the net cash proceeds of any incurrence or issuance of certain debt, other than debt permitted under the credit agreement.

The credit agreement also contains a financial covenant that does not permit the company to allow its consolidated leverage ratio to exceed (i) in the case of any fiscal quarter ending on or prior to Sept. 30, 2024, 4.75 to 1:00; (ii) in the case of any fiscal quarter ending on or following Sept. 30, 2024 and prior to Sept. 30, 2025, 4.50 to 1:00; and (iii) in the case of any fiscal quarter ending on or following Sept. 30, 2025, 4.25 to 1.00, in each case subject, to (a) increases of 0.25 in connection with the consummation of any material acquisition and applicable to the fiscal quarter in which such acquisition is consummated and the three consecutive fiscal quarters thereafter, and (b) a maximum cap of 5.00 to 1.00.

Bank of America, NA is the administrative agent.

BofA Securities,Inc., JPMorgan Chase Bank, NA, Goldman Sachs Bank USA, Royal Bank of Canada, Capital One, NA, Citibank, NA, Fifth Third Bank, NA, Manufacturers and Traders Trust Co., MUFG Bank, Ltd., PNC Capital Markets LLC, Regions Capital Markets, TD Securities (USA) LLC, Truist Securities, Inc., U.S. Bank NA and Wells Fargo Bank, NA are the joint lead arrangers and joint bookrunners.

Proceeds will be used to help fund a cash distribution to NCR Corp. in connection with the spinoff of NCR Atleos, which may be used to repay a portion of existing debt and pay fees and expenses related to the spinoff, and for general corporate purposes.

Closing is expected in the fourth quarter.

NCR Atleos is a financial technology company providing self-directed banking solutions through automated teller machines and interactive teller machines.

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