Item 1.01. Entry into a Material Definitive Agreement.
NCR Corporation (the “Company”) amended and restated its existing Receivables Financing Agreement, dated as of November 21, 2014, by entering into that certain Receivables Purchase Agreement, dated as of September 30, 2021 (the “Purchase Agreement”), by and among the Company, as servicer, NCR Receivables LLC (“NCR Receivables”), an existing wholly-owned special purpose subsidiary, as purchaser, NCR Canada Receivables LP, a newly-formed special purpose subsidiary (“NCR Canada Receivables”), NCR Canada Corp., as servicer, PNC Bank, National Association (“PNC”), as administrative agent, PNC, MUFG Bank, Ltd., Victory Receivables Corporation and the other purchasers from time to time party thereto (the “Purchasers”), and PNC Capital Markets LLC, as structuring agent. In connection therewith, (i) the Company, Cardtronics USA, Inc. and ATM National, LLC entered into that certain Amended and Restated Purchase and Sale Agreement with NCR Receivables (the “U.S. Sale Agreement”) and (ii) NCR Canada Corp. entered into that certain Canadian Purchase and Sale Agreement with NCR Canada Receivables (the “Canadian Sale Agreement,” and together with the U.S. Sale Agreement, the “Sale Agreements”).
The Purchase Agreement and the Sale Agreements modify certain terms of the Company’s existing revolving trade receivables securitization facility (the “T/R Facility”) in order to, among other things, (i) permit the addition of Canadian trade receivables to the T/R Facility, (ii) extend the maturity of the T/R Facility by two years, (iii) add certain U.S. and Canadian subsidiaries of the Company to the T/R Facility as originators and/or as servicers and (iv) allow NCR Receivables to sell to PNC and the other purchasers party to the Purchase Agreement an undivided ownership interest in a portion of the trade receivables that NCR Receivables acquires under the U.S. Sale Agreement. The portion of the trade receivables that NCR Receivables sells to the Purchasers under the Purchase Agreement will be de-recognized from the Company’s consolidated balance sheet and treated as sales under ASC 860. The portion of trade receivables that are not sold by NCR Receivables and all the trade receivables acquired by NCR Canada Receivables pursuant to the Canadian Sale Agreement are pledged to PNC for the benefit of the Purchasers to secure repayment of the trade receivables sold to PNC and the performance of other obligations of NCR Receivables and NCR Canada Receivables under the Purchase Agreement. The Purchasers have committed to invest in up to $300 million of trade receivables at any time outstanding. The availability of this commitment is based on the availability of eligible receivables and other customary factors, and the satisfaction of certain conditions.
All of the assets of NCR Receivables and NCR Canada Receivables are restricted collateral for the payment of their obligations under the T/R Facility. None of the assets or credit of NCR Receivables or NCR Canada Receivables is available to satisfy the debts and obligations owed to the creditors of the Company or to the creditors of any other originator under the T/R Facility. Each of the Company and each other originator is independently liable for its own customary representations, warranties, covenants and indemnities as originator and/or servicer of the trade receivables, except that the Company has entered into a performance guaranty on customary terms pursuant to which it has guaranteed the performance of the originator and servicing obligations of its subsidiaries that are participating in the T/R Facility. The Company will include the assets, liabilities and results of operations of NCR Receivables and NCR Canada Receivables in its consolidated financial statements.
Investments made by the Purchasers in the trade receivables under the Purchase Agreement accrue yield at a fluctuating rate based on LIBOR (or a successor benchmark determined in accordance with the terms of the Purchase Agreement) or commercial paper interest rates.
In addition, NCR Receivables paid certain upfront closing fees to the administrative agent for its services and will pay annual commitment and other customary fees to the Purchasers. NCR Receivables may prepay any investment made by the Purchasers under the Purchase Agreement with two business days’ notice, and may also reduce the facility limit with 15 days’ prior notice.
