Virtus Investment Partners, Inc. entered into Amendment No. 1 to Credit Agreement with Morgan Stanley Senior Funding, Inc., as administrative agent, and the lenders party thereto. Pursuant to the Amendment and the Credit Agreement, the Amendment No. 1 Additional Term Lenders have provided commitments for $105 million of additional term loans, with such Additional Term Loan Commitments to be available through an agreed upon date. The obligation of the Amendment No. 1 Additional Term Lenders to fund the Additional Term Loan Commitments is subject to, among other customary conditions, the substantially concurrent consummation of the Company’s previously announced agreement to acquire (i) 70% of the outstanding limited partnership interests of Sustainable Growth Advisers, LP (SGA) and (ii) 100% of the outstanding membership interests of SGIA, LLC, the general partner of SGA (the “Transaction”).
 
The Amendment reduces the applicable margin for all amounts outstanding under the Credit Agreement, commencing as of the Effective Date, from 3.75% to 2.50%, in the case of LIBOR-based loans, and from 2.75% to 1.50% in the case of alternate base rate loans, in each case subject to a 25 basis point reduction based on the secured net leverage ratio (as defined in the Credit Agreement) of the Company as of the last day of the preceding fiscal quarter being not greater than 1.00 to 1.00 as of the last day of the preceding fiscal quarter, as reflected in certain financial reports required under the Credit Agreement. The Additional Term Loan Commitments are subject to a delayed draw fee accruing for the period (i) from the date which is 31 days after the Effective Date to the date which is 60 days after the Effective Date, at 1.25% per annum and (ii) thereafter, at 2.50% per annum until the earlier of the funding or termination of the Additional Term Loan Commitments, in each case, calculated in respect of the aggregate amount of the Additional Term Commitments during such period.

The Amendment also deletes a maximum Total Net Leverage Ratio financial maintenance covenant as applied to term loans under the Credit Agreement. The Credit Agreement includes, for the benefit of revolving lenders, a financial maintenance covenant that the Company will not permit the Total Net Leverage Ratio to exceed 2.50:1.00 as of the last day of any fiscal quarter; provided that this covenant will apply only if on such day the aggregate principal amount of outstanding revolving loans and letters of credit exceeds 30% of the aggregate revolving commitments as of such day.