Invesco Ltd filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation, Financial Statements and Exhibits
$IVZ
Investment Managers
Finance
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): May 16, 2025
(Exact name of registrant as specified in its charter)
| (State or Other Jurisdiction of Incorporation or Organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||||||||||||||||||
| (Address of Principal Executive Offices) | (Zip Code) | ||||||||||||||||||||||
(404 ) 892-0896
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 1.01 | Entry Into a Material Definitive Agreement. | ||||
On May 16, 2025, the Company entered into material agreements consisting of a Term Loan Agreement and a Credit Agreement, in each case as defined and described under the applicable subheading below.
Term Loan Agreement
On May 16, 2025 (the “Closing Date”), Invesco Ltd. (the “Company”) and its indirect subsidiary, Invesco Finance, Inc. (the “Term Loan Borrower”), entered into an unsecured $1.0 billion Credit Agreement (the “Term Loan Agreement”) with a syndicate of banks, financial institutions and other institutional lenders named therein, including Bank of America, N.A., as administrative agent. The Term Loan Agreement includes a $500 million 3-year term loan (the “3-Year Term Loan”) and a $500 million 5-year term loan (the “5-Year Term Loan”, and, together with the 3-Year Term Loan, collectively, the “Term Loans”), and are denominated in U.S. dollars. All of the obligations of the Term Loan Borrower under the Term Loan Agreement are guaranteed by the Company (the “Term Loan Company Guaranty”).
The Term Loans were borrowed in full on the Closing Date to finance the Company’s previously announced repurchase (the “Repurchase”) of $1.0 billion of the Company’s outstanding 5.9% Fixed Rate Non-Cumulative Perpetual Series A Preference Stock (the “Preferred Stock”) held by MassMutual Mutual Life Insurance Company (“MassMutual”) pursuant to a Preferred Share Repurchase Agreement, dated as of April 21, 2025 (the “Repurchase Agreement”), entered into by and between the Company and MassMutual. A premium of 15% was paid to MassMutual on the liquidation preference of $1,000 per share. The Repurchase was completed on the Closing Date.
The 3-Year Term Loan is repayable in full at the 3-Year Term Loan maturity date on May 16, 2028. The 5-Year Term Loan requires amortization payments of 2.5% per quarter commencing on the third anniversary of the Closing Date, and the remaining outstanding amount is repayable in full at the 5-Year Term Loan maturity date on May 16, 2030. Under certain conditions, the Term Loan Borrower may elect to increase the Term Loans to an aggregate maximum principal amount of $1.5 billion. None of the lenders under the Term Loan Agreement are obligated to provide such additional commitments to the Term Loan Borrower.
The Term Loans under the Term Loan Agreement will bear interest at (i) Term SOFR for specified interest periods plus a SOFR related credit spread adjustment of 10 basis points or (ii) a base rate equal to the highest of (a) the Bank of America prime rate, (b) the Federal Funds rate plus 0.50%, (c) Term SOFR for an interest period of one month plus 1.00% and (d) 1.00%), plus, in either case, an applicable margin determined based on the credit ratings of the Company or its indirect subsidiary, Invesco Finance PLC (the “Revolving Borrower”). Based on the current credit ratings of the Company and the Revolving Borrower, (x) for the 3-Year Term Loan, the applicable margin for SOFR-based loans would be 1.125%, and base rate loans would be 0.125%, and (y) for the 5-Year Term Loan, the applicable margin for SOFR-based loans would be 1.250%, and base rate loans would be 0.250%.
The Term Loan Agreement also contains customary restrictive covenants on the Company and its subsidiaries. Restrictive covenants in the Term Loan Agreement include prohibitions on creating, incurring or assuming liens; entering into merger arrangements; selling, leasing, transferring or otherwise disposing of assets; making a material change in the nature of the business; making a significant accounting policy change in certain situations; and incurring indebtedness through the Company’s subsidiaries (other than the Term Loan Borrower or the Revolving Borrower). Many of these restrictions are subject, however, to certain minimum or materiality thresholds and other exceptions. Financial covenants under the Term Loan Agreement include the quarterly maintenance by the Company of (i) a Debt/EBITDA ratio, as defined in the Term Loan Agreement, of not greater than 3.25:1.00 (the “Leverage Ratio”) and (ii) an interest coverage ratio (EBITDA, as defined in the Term Loan Agreement, divided by interest expense for the four consecutive fiscal quarters ended on or immediately prior to the date of determination) of not less than 4.00:1.00. Subject to certain terms and conditions related to an acquisition in which the consideration exceeds $500 million, the Term Loan Borrower may elect to increase the required Leverage Ratio to 3.75:1.00 for a period of up to four fiscal quarters. For purposes of calculating the Leverage Ratio, the Term Loan Agreement uses Adjusted Debt, as defined in the Term Loan Agreement, and includes a netting provision pursuant to which debt is reduced by an amount of up to $600 million based on freely distributable, unrestricted cash and cash equivalents of the Company and its subsidiaries.
The Term Loan Agreement contains customary provisions regarding events of default which could result in an acceleration or increase in amounts due, including (subject to certain materiality thresholds and grace periods)
payment default, failure to comply with covenants, material inaccuracy of a representation or warranty, bankruptcy or insolvency proceedings, change of control, certain judgments, ERISA matters, cross-default to other debt and hedging agreements, governmental action prohibiting or restricting the Company or its subsidiaries in a manner that has a material adverse effect and failure of certain guaranty obligations.
The lenders (and their respective affiliates) may have provided, and may in the future provide, investment banking, cash management, underwriting, lending, commercial banking, leasing, foreign exchange, trust or other advisory services to the Company and its subsidiaries and affiliates. These parties may have received, and may in the future receive, customary compensation for these services.
The foregoing description of the Term Loan Agreement and the Term Loan Company Guaranty does not purport to be complete and is qualified in its entirety by reference to the Term Loan Agreement and the Term Loan Company Guaranty, which are attached hereto as Exhibits 10.1 and 10.2, respectively. Except for its status as a contractual document that establishes and governs the legal relations among the parties thereto with respect to the transaction described in this Current Report on Form 8-K, the Term Loan Agreement is not intended to be a source of factual, business or operational information about the parties. Investors are not third-party beneficiaries under the Term Loan Agreement and should not rely on the representations, warranties and covenants, or any descriptions thereof, as characterizations of the actual state of facts or condition of the parties or any of their affiliates.
Credit Agreement
On May 16, 2025, the Company and the Revolving Borrower entered into a five-year unsecured $2.5 billion Seventh Amended and Restated Credit Agreement (the “Credit Agreement”) with a syndicate of banks, financial institutions and other institutional lenders named therein, including Bank of America, N.A., as administrative agent. The Credit Agreement includes a $50 million sublimit for the issuance of standby letters of credit and a $150 million sublimit for swingline loans. All advances under the Credit Agreement are denominated in U.S. dollars and letters of credit issued thereunder may be denominated in U.S. dollars or Sterling. All of the obligations of the Revolving Borrower under the Credit Agreement are guaranteed by the Company (the “Revolver Company Guaranty”).
The Credit Agreement amends and restates the Company’s $2.0 billion Sixth Amended and Restated Credit Agreement, dated as of April 26, 2023 (the “Prior Credit Agreement”) entered into by the Company and the Revolving Borrower. The Prior Credit Agreement was scheduled to expire on April 26, 2028. No prepayment fees were incurred in connection with the amendment and restatement of the Prior Credit Agreement.
Amounts borrowed under the Credit Agreement are repayable at maturity on May 16, 2030. The proceeds of the Credit Agreement are to be used for working capital, capital expenditures, general corporate purposes and all other lawful purposes. Under certain conditions, the Revolving Borrower may elect to increase the aggregate principal amount of commitments under the Credit Agreement to a maximum amount of $3 billion. None of the lenders under the Credit Agreement are obligated to provide such additional commitments to the Revolving Borrower.
Borrowings under the Credit Agreement will bear interest at (i) Term SOFR for specified interest periods plus a SOFR related credit spread adjustment of 10 basis points or (ii) a floating rate (based upon either (X) daily SOFR or (Y) a base rate equal to the highest of (a) the Bank of America prime rate, (b) the Federal Funds rate plus 0.50%, (c) Term SOFR for an interest period of one month plus 1.00% and (d) 1.00%), plus, in either case, an applicable margin determined based on the credit ratings of the Company or the Revolving Borrower. Based on the current credit ratings of the Company and the Revolving Borrower, the applicable margin for SOFR-based loans would be 1.000% and for base rate loans would be 0%. In addition, the Revolving Borrower is required to pay the lenders a commitment fee on the aggregate unused commitments of the lenders at a rate per annum which is based on the credit ratings of the Company or the Revolving Borrower. Based on the current credit rating of the Company and the Revolving Borrower, the commitment fee would be equal to 0.100%.
The Credit Agreement also contains customary restrictive covenants on the Company and its subsidiaries. Restrictive covenants in the Credit Agreement include prohibitions on creating, incurring or assuming liens; entering into merger arrangements; selling, leasing, transferring or otherwise disposing of assets; making a material change in the nature of the business; making a significant accounting policy change in certain situations; and incurring indebtedness through the subsidiaries (other than the Revolving Borrower and the Term Loan Borrower). Many of these restrictions are subject, however, to certain minimum or materiality thresholds and other exceptions. Financial covenants under the Credit Agreement include the quarterly maintenance by the Company of (i) a Debt/EBITDA ratio, as defined in the
Credit Agreement, of not greater than 3.25:1.00 (the “Leverage Ratio”) and (ii) an interest coverage ratio (EBITDA, as defined in the Credit Agreement, divided by interest expense for the four consecutive fiscal quarters ended on or immediately prior to the date of determination) of not less than 4.00:1.00. Subject to certain terms and conditions related to an acquisition in which the consideration exceeds $500 million, the Revolving Borrower may elect to increase the required Leverage Ratio to 3.75:1.00 for a period of up to four fiscal quarters. For purposes of calculating the Leverage Ratio, the Credit Agreement uses Adjusted Debt, as defined in the Credit Agreement, and includes a netting provision pursuant to which debt is reduced by an amount of up to $600 million based on freely distributable, unrestricted cash and cash equivalents of the Company and its subsidiaries.
The Credit Agreement contains customary provisions regarding events of default which could result in an acceleration or increase in amounts due, including (subject to certain materiality thresholds and grace periods) payment default, failure to comply with covenants, material inaccuracy of a representation or warranty, bankruptcy or insolvency proceedings, change of control, certain judgments, ERISA matters, cross-default to other debt and hedging agreements, governmental action prohibiting or restricting the Company or its subsidiaries in a manner that has a material adverse effect and failure of certain guaranty obligations.
The lenders (and their respective affiliates) may have provided, and may in the future provide, investment banking, cash management, underwriting, lending, commercial banking, leasing, foreign exchange, trust or other advisory services to the Company and its subsidiaries and affiliates. These parties may have received, and may in the future receive, customary compensation for these services.
The foregoing description of the Credit Agreement and the Revolver Company Guaranty does not purport to be complete and is qualified in its entirety by reference to the Credit Agreement and the Revolver Company Guaranty, which are attached hereto as Exhibits 10.3 and 10.4, respectively. Except for its status as a contractual document that establishes and governs the legal relations among the parties thereto with respect to the transaction described in this Current Report on Form 8-K, the Credit Agreement is not intended to be a source of factual, business or operational information about the parties. Investors are not third-party beneficiaries under the Credit Agreement and should not rely on the representations, warranties and covenants, or any descriptions thereof, as characterizations of the actual state of facts or condition of the parties or any of their affiliates.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. | ||||
The discussion of each of the Term Loan Agreement and Credit Agreement set forth in response to Item 1.01 above are incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. | ||||
| (d) | Exhibits | ||||
| Exhibit No. | Description | |||||||
| 10.1* | ||||||||
| 10.2 | ||||||||
| 10.3* | ||||||||
| 10.4 | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||
* Certain of the exhibits and schedules to this exhibit have been omitted in accordance with Item 601(a)(5) of Regulation S-K. The Company agrees to furnish a copy of all omitted exhibits and schedules to the Securities and Exchange Commission upon its request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Invesco Ltd. | |||||
| By: | /s/ Jeffrey H. Kupor | ||||
| Name: Jeffrey H. Kupor | |||||
| Title: Company Secretary | |||||
Date: May 16, 2025