VVI Viad Corp New

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

As previously disclosed, we are a party to that certain $450 million Second Amended and Restated Credit Agreement (the “Credit Agreement”), dated October 24, 2018, with JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders named therein (collectively, the “Lenders”) (as amended by Amendment No. 1 to the Credit Agreement, dated July 23, 2019), which provides for a $450 million revolving credit facility (the “Revolving Credit Facility”) with a maturity date of October 24, 2023.  The material terms of the Credit Agreement are described under “Note 12. Debt and Finance Lease Obligations” of the Notes to Consolidated Financial Statements of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on February 26, 2020, which description is incorporated by reference herein.

On March 17, 2020, we provided notice to the Lenders to borrow the remaining available capacity of $123 million under the Revolving Credit Facility as a proactive measure to increase our cash position and preserve financial flexibility in light of current uncertainty in the global markets resulting from the COVID-19 outbreak.  In accordance with the terms of the Revolving Credit Facility, the proceeds from these borrowings may in the future be used for working capital, general corporate, or other purposes permitted thereunder.  

The current interest rate for this $123 million borrowing is Prime plus 100 basis points, or 4.25%. We intend to convert this to a London Interbank Offered Rate (“LIBOR”) borrowing. Based on our leverage ratio at December 31, 2019, our current spread over LIBOR is 200 basis points.

FORWARD-LOOKING STATEMENTS

This Current Report on Form 8-K contains a number of forward-looking statements. Words, and variations of words, such as “will” or “may” and similar expressions are intended to identify our forward-looking statements.  Similarly, statements that describe our business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements.  These forward-looking statements are not historical facts and are subject to a host of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those in the forward-looking statements.

Important factors that could cause actual results to differ materially from those described in our forward-looking statements include, but are not limited to, the following:

For a more complete discussion of the risks and uncertainties that may affect our business or financial results, please see Item 1A, “Risk Factors,” of our most recent Annual Report on Form 10-K filed with the SEC.  We disclaim and do not undertake any obligation to update or revise any forward-looking statement in this press release except as required by applicable law or regulation.

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