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) March 29, 2010
Wyndham Worldwide Corporation
(Exact name of Registrant as specified in its charter)
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| Delaware
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1-32876
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20-0052541 |
| (State or other jurisdiction
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(Commission File No.)
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(I.R.S. Employer |
| of incorporation)
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Identification Number) |
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| 22 Sylvan Way
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| Parsippany, NJ
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07054 |
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| executive office) |
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Registrant’s telephone number, including area code: (973) 753-6000
None
(Former name or former address if changed since last report)
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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01. Entry into a Material Definitive Agreement.
On March 29, 2010, we entered into
a $950 million credit agreement (the “Credit
Agreement”), with the lenders party to the Agreement from time to time, JPMorgan Chase Bank, N.A.,
as syndication agent, The Bank of Nova Scotia, Deutsche Bank AG New York Branch, The Royal Bank of
Scotland PLC, and Credit Suisse AG, Cayman Islands Branch, as co-documentation agents, and Bank of
America, N.A., as administrative agent, for the lenders. We may request that the revolving credit
facility be increased from time to time by an aggregate amount of $250 million. The credit facility matures on October 1, 2013. The Credit Agreement provides
for up to $350 million of the revolving credit facility to be available for the issuance of letters
of credit and up to $100 million of the revolving credit facility to be available for swingline
loans. The Credit Agreement replaced our existing $900 million credit facility.
Under the Credit Agreement,
we pay a facility fee on the total amount of the facility (whether used
or unused) that varies between 0.200% and 0.750%, depending on our credit rating. Borrowings under
the Credit Agreement bear interest at an annual rate based on either the “eurodollar rate” or the
“alternate base rate” in effect plus the “applicable margin”. Borrowings under the Credit Agreement
that are based on Eurodollar rates are generally based on the rate (adjusted for any statutory
reserve requirements) for eurocurrency deposits for one, two, three, six or, subject to the
approval of each lender, 12 months which is the British Bankers Association LIBOR rate, as
published by Reuters. The “alternate base rate” of interest is the highest of (rounded up to the
next 1/16 of 1%) of (i) the Federal Funds Rate plus 1/2 of 1%, (ii) the rate of interest in effect
for such day as publicly announced from time to time by Bank of America, N.A. as its “prime rate,”
and (iii) LIBOR plus 1%. The “prime rate” is a rate set by Bank of America, N.A. based upon various
factors including Bank of America, N.A.’s costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans, which may be priced at,
above, or below such announced rate. The “applicable margin” for eurodollar rate loans varies
between 2.05% and 3.00%, depending on our credit rating. The “applicable margin” for alternate
base rate loans is 1.00% less than the “applicable margin” for eurodollar rate loans then in
effect.
The Credit Agreement contains customary terms and conditions, including certain financial
covenants, including the requirement to maintain a Minimum Consolidated Interest Coverage Ratio (Consolidated
EBITDA/Consolidated Interest Expense) of at least 3.0x and a Maximum Consolidated Leverage Ratio
(Consolidated Total Indebtedness/Consolidated EBITDA) of 3.75x or less. The Credit Agreement also contains
negative covenants including, without limitation, covenants restricting our ability to incur liens
or additional indebtedness, to sell assets, to merge or consolidate with another entity and to enter
into sale and leaseback transactions
The events of default under the Credit Agreement include, but are not limited to, the following:
(1) failure to pay outstanding principal or interest, (2) failure of representations or warranties
to be correct, in any material respects, (3) failure to perform any other term, covenant or
agreement and such failure is not remedied within 30 days of notice of such failure, (4) a
cross-default with other debt in certain circumstances, (5) certain defaults upon obligations under
the Employee Retirement Income Security Act, (6) bankruptcy, or (7) a change in control. Such
events of default would require the repayment of any outstanding borrowings and the termination of
the right to borrow additional funds under the Credit Agreement.
Some of the lenders under the Credit Agreement and their affiliates have various relationships with
us and our subsidiaries involving the provision of financial services, including cash management,
investment banking, trust and leasing services. In addition, we and some of our subsidiaries have
entered into foreign exchange and other derivative arrangements with certain of the lenders and
their affiliates.
The foregoing description of the Credit Agreement is not complete and is qualified in its entirety
by reference to the Credit Agreement, attached hereto as Exhibit 10.1 and incorporated by reference
herein.