FTI Consulting has entered into a five-year, $550.0 million senior secured revolving line of credit. The credit facility effectively amends and extends the maturity date of the company's existing $350.0 million credit facility from November 27, 2017 to June 26, 2020. Borrowings under the credit facility may be used as permitted under the terms of the credit facility to finance working capital, for capital expenditures and for other general corporate purposes, to repay or redeem existing debt, including under the company's existing credit facilities or senior notes, and for permitted acquisitions.
Bank of America, N.A. is acting as the administrative agent for the credit facility. J.P. Morgan Chase Bank, N.A. and HSBC Bank USA, N.A. acted as joint lead arrangers and joint book running managers of the credit agreement.
Borrowings under the credit agreement will bear interest at a rate equal to LIBOR plus an applicable margin or at an alternative base rate plus an applicable margin. The applicable margin for LIBOR borrowings will range between an annual rate of 1.375% and 2.00% and the applicable margin for alternative base rate borrowings will range between an annual rate of 0.375% and 1.00%. The applicable margin will initially be set at an annual rate of 1.75% for LIBOR borrowings and 0.75% for alternative base rate borrowings and will subsequently vary according to the company's Consolidated Total Leverage Ratio. The company will also pay a commitment fee on unused amounts of the credit line initially set at an annual rate of 0.30% and subsequently ranging from an annual rate of 0.25% to 0.35% according to the company's Consolidated Total Leverage Ratio.
The obligations of the company under the credit facility are guaranteed by substantially all of the company's domestic subsidiaries and secured by substantially all of the company's and its domestic subsidiaries' existing and after-acquired assets, subject to certain exceptions set forth in the definitive debt and security documentation.
The company currently intends, on or before October 1, 2015 and subject to market conditions and other factors, to retire its $400.0 million of 6.75% Notes due 2020 (the "2020 Notes"), funded by a combination of approximately $275.0 million of borrowings under the credit facility and approximately $140.0 million of cash on hand. While this is its current intention, the Company is not providing a notice of redemption or otherwise making an irrevocable commitment to retire the 2020 Notes as described above, and any such decision will, among other things, be subject to further review and final approval by the company's Board of Directors.
FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations protect and enhance enterprise value in an increasingly complex legal, regulatory and economic environment. With more than 4,400 employees located in 26 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges in areas such as investigations, litigation, mergers and acquisitions, regulatory issues, reputation management, strategic communications and restructuring.