GoDaddy Inc. Completes Refinancing of Existing Tranche B-5 Term Loans

Rhea-AI Summary

GoDaddy Inc. announced the closing of a credit agreement refinancing, with a new $1,752 million tranche of term loans maturing in 2029. The Tenth Amendment to the Second Amended and Restated Credit Agreement provides for the Replacement Term Loans, used to refinance all outstanding Existing Tranche B-5 Term Loans.

Financial Analyst

GoDaddy Inc.'s recent closure of a credit agreement refinancing and entry into a Tenth Amendment signifies a strategic financial maneuver. By refinancing the existing Tranche B-5 Term Loans with a new $1.752 billion tranche maturing in 2029, the company is likely aiming to capitalize on more favorable terms. The 1.00% per annum amortization rate is particularly notable, as it suggests a conservative repayment schedule, which could improve cash flow management and potentially strengthen the company's balance sheet.

Investors should monitor the interest rate associated with the new tranche, as it will impact the cost of borrowing and ultimately the company's profitability. The refinancing outcome may also hint at GoDaddy's confidence in its future cash flows, as the ability to service debt is contingent upon robust operational performance. This financial restructuring could be viewed positively if it aligns with industry refinancing rates and improves GoDaddy's debt profile.

Market Research Analyst

The tech sector, particularly companies like GoDaddy that provide internet domain registration and web hosting, operates in a highly competitive environment with constant pressure to innovate and maintain market share. Refinancing activities such as this one allow companies to optimize their capital structure and potentially allocate more resources towards growth initiatives and technological advancements.

From a market perspective, this refinancing could signal GoDaddy's intent to invest in new services or market expansion, which could affect its competitive positioning. Stakeholders should evaluate how these financial decisions correlate with GoDaddy's strategic plans and whether they indicate an aggressive or conservative growth approach. The timing and terms of the refinancing may also reflect broader market conditions and lender confidence in the tech sector.

Legal Expert

Legal intricacies of the Tenth Amendment to GoDaddy's Credit Agreement carry implications for contractual obligations and corporate governance. It's essential to scrutinize the terms and covenants of the amendment, which will be filed with the SEC, for any changes in covenants or restrictions that could affect GoDaddy's operational flexibility.

Additionally, the involvement of multiple parties, including the Royal Bank of Canada as the Administrative Agent, suggests a complex negotiation process. The amendment's details may provide insights into GoDaddy's leverage and covenant headroom, which are critical for maintaining corporate agility. Stakeholders should be aware of any material changes to covenants that could impact corporate strategy and financial health.

TEMPE, Ariz., Jan. 22, 2024 /PRNewswire/ -- GoDaddy Inc. (NYSE: GDDY) today announced Go Daddy Operating Company, LLC and GD Finance Co, LLC (each, a subsidiary of GoDaddy Inc. and together, the "Borrowers") closed the previously announced credit agreement refinancing. In connection with the closing, the Borrowers entered into a Tenth Amendment (the "Tenth Amendment") to the Second Amended and Restated Credit Agreement, dated as of February 15, 2017 (as amended, restated, supplemented or otherwise modified, refinanced or replaced from time to time, the "Credit Agreement"), by and among the Borrowers, Desert Newco, LLC, Royal Bank of Canada as the Administrative Agent, the Collateral Agent, the Swingline Lender and a Letter of Credit Issuer, and the other parties party thereto. Capitalized terms used, but not defined in this news release are as defined in the Credit Agreement as amended by the Tenth Amendment, which will be filed with the Securities and Exchange Commission.

The Tenth Amendment provides for a new $1,752 million tranche of term loans maturing in 2029 (the "Replacement Term Loans"), the proceeds of which were used to refinance all outstanding Existing Tranche B-5 Term Loans. The amortization rate for the Replacement Term Loans is 1.00% per annum and the first installment shall be payable on or about March 31, 2024. Pursuant to the Tenth Amendment, the Applicable Margin is (i) 2.00% for the Replacement Term Loans that are SOFR Loans and (ii) 1.00% for the Replacement Term Loans that are ABR Loans.

About GoDaddy

GoDaddy helps millions of entrepreneurs globally start, grow, and scale their businesses. People come to GoDaddy to name their idea, build a professional website, attract customers, sell their products and services, and accept payments online and in-person. GoDaddy's easy-to-use tools help microbusiness owners manage everything in one place, and its expert guides are available to provide assistance 24/7. To learn more about the company, visit www.GoDaddy.com.

Source: GoDaddy Inc.

© 2024 GoDaddy Inc. All Rights Reserved.

 

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SOURCE GoDaddy Inc.

What did GoDaddy Inc. announce?

GoDaddy Inc. announced the closing of a credit agreement refinancing.

What is the ticker symbol for GoDaddy Inc.?

The ticker symbol for GoDaddy Inc. is GDDY.

What is the amount of the new tranche of term loans?

The new tranche of term loans is $1,752 million.

When do the Replacement Term Loans mature?

The Replacement Term Loans mature in 2029.

What were the proceeds of the Replacement Term Loans used for?

The proceeds of the Replacement Term Loans were used to refinance all outstanding Existing Tranche B-5 Term Loans.