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
December 29, 2010
Date of report (Date of earliest event reported)
PIPER JAFFRAY COMPANIES
(Exact Name of Registrant as Specified in its Charter)
| |
|
|
|
|
|
| Delaware
|
|
1-31720
|
|
30-0168701 |
|
|
|
|
|
|
| (State of Incorporation)
|
|
(Commission File
Number)
|
|
(I.R.S. Employer
Identification No.) |
| |
|
|
|
800 Nicollet Mall, Suite 800
Minneapolis, Minnesota
|
|
55402 |
|
|
|
|
| (Address of Principal Executive Offices)
|
|
(Zip Code) |
(612) 303-6000
(Registrant’s Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2):
|
|
|
| o |
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
|
|
| o |
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
|
|
| o |
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
|
|
|
| o |
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
TABLE OF CONTENTS
|
|
|
| Item 2.03. |
|
Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant. |
On December 29, 2010, Piper Jaffray Companies (the “Company”) entered into a Credit Agreement with
SunTrust Bank, as administrative agent (the “Agent”), and the lenders party thereto (the “Credit
Agreement”). The Credit Agreement creates a $50 million revolving credit facility that the Company
may draw upon from time to time, subject to certain conditions, and will terminate three years
after the date of the Credit Agreement. The Company also received term loans in the aggregate
amount of $100 million pursuant to the Credit Agreement on
December 30, 2010. The term loans
amortize in equal quarterly installments commencing on March 31, 2011 in an aggregate annual amount
equal to (i) 10% of the original principal amount of the term loans during the first year, (ii) 25%
of the original principal amount during the second year, and (iii) 65% of the original principal
amount during the third year. Any remaining principal amount and unpaid interest will be due and
payable three years after the date of the Credit Agreement. The Company’s obligations under the
Credit Agreement are guaranteed by certain of its subsidiaries and are secured by a pledge of the
capital stock of certain of the Company’s subsidiaries, a pledge of all intercompany indebtedness
of the Company and its subsidiaries and a lien on the proceeds of a $50 million dividend received
by the Company from its subsidiary, Piper Jaffray & Co. The interest rate for loans under the
Credit Agreement generally is, at the option of the Company, equal to the London Interbank Offered
Rate (“LIBOR”) or base rate, plus an applicable margin based on the Company’s leverage ratio.
The Credit Agreement includes customary events of default, including failure to pay principal when
due or failure to pay interest within three business days of when due, failure to comply with the
covenants in the Credit Agreement and related documents, failure to pay or another event of default
under other material indebtedness in an amount exceeding $5 million, bankruptcy or insolvency of
the Company or any of its subsidiaries, a change in control of the Company or a failure of Piper
Jaffray & Co. to extend, renew or refinance its existing liquidity facility on substantially the
same terms as the existing facility. If there is any event of default under the Credit Agreement,
the Agent may declare the entire principal and any accrued interest on the loans under the Credit
Agreement to be due and payable and exercise other customary remedies.
The Credit Agreement includes covenants that, among other things, limit the Company’s leverage
ratio, require maintenance of certain levels of cash and regulatory net capital, require the
Company’s asset management segment to achieve minimum earnings before interest, taxes, depreciation
and amortization, and impose certain limitations on the Company’s ability to make acquisitions and
make payments on its capital stock.
The Company intends to use the proceeds from the Credit Agreement to repay the unpaid principal and
interest on the Variable Rate Senior Notes due December 31, 2010 (the “Notes”) issued by the
Company and sold on December 31, 2009 to funds advised by Pacific Investment Management Company LLC
as well as for working capital and general corporate purposes.
The foregoing description of the Credit Agreement does not purport to be complete and is qualified
in its entirety by reference to the Credit Agreement, a copy of which is filed as Exhibit 10.1
hereto and incorporated by reference in this Current Report on Form 8-K.