GoDaddy Inc. Completes Refinancing and Extension of Existing Tranche B-4 Term Loans and Certain Tranche B-6 Term Loans

Rhea-AI Summary

GoDaddy (NYSE: GDDY) announced the completion of refinancing and extension of its Tranche B-4 and Tranche B-6 term loans. The Eleventh Amendment to the credit agreement introduces a new $1 billion tranche of term loans maturing in 2031. The refinancing is intended to extend the maturity and lower the interest rates of the existing loans, with a 1.00% amortization rate per annum and first installment due by September 30, 2024. The new Applicable Margin is set at 1.75% for SOFR Loans and 0.75% for ABR Loans.

Positive

• Completion of refinancing and extension of Tranche B-4 and Tranche B-6 term loans.
• Introduction of a new $1 billion tranche of term loans maturing in 2031.
• Lowered interest rates: 1.75% for SOFR Loans and 0.75% for ABR Loans.
• Extended loan maturity dates, providing financial flexibility.

Negative

• Increased debt load with the addition of a new $1 billion loan.
• Long-term financial obligations extended to 2031.

Insights

Financial Analyst

GoDaddy Inc.'s recent refinancing of its existing Tranche B-4 and Tranche B-6 term loans represents a significant financial maneuver. The introduction of a new $1,000 million tranche of term loans maturing in 2031 signals the company's initiative to extend its debt profile, which can have several implications for investors.

Firstly, extending the maturity to 2031 provides GoDaddy with a longer timeline to manage and repay its debt, potentially reducing immediate financial pressure. This move might be seen as a way to stabilize cash flows and allocate resources more effectively towards growth and operational initiatives.

The new amortization rate of 1% per annum suggests a measured approach to debt repayment, ensuring the company doesn't face heavy principal repayments in the short term. This can be a positive signal to the market, indicating strong financial planning and foresight.

However, it's important to consider the Applicable Margin adjustments: 1.75% for SOFR Loans and 0.75% for ABR Loans. These margins, while relatively low, still represent an interest expense that the company needs to manage effectively to maintain profitability.

For retail investors, this refinancing can be seen as a strategic move that could enhance GoDaddy's financial stability over the long term. However, the effectiveness of this strategy will largely depend on the company's ability to manage its interest expenses and generate sufficient cash flows to meet its obligations.

In summary, while the refinancing indicates a prudent financial strategy by extending debt maturities and lowering immediate amortization pressures, investors should keep an eye on the company's interest expenses and overall financial health moving forward.

TEMPE, Ariz., May 31, 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 and extension. In connection with the closing, the Borrowers entered into an Eleventh Amendment (the "Eleventh 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 herein, but not otherwise defined herein are as defined in the Credit Agreement as amended by the Eleventh Amendment, which will be filed with the Securities and Exchange Commission.

The Eleventh Amendment provides for a new $1,000 million tranche of term loans maturing in 2031 (the "Replacement Term Loans"), the proceeds of which were used to refinance and extend the maturity of all outstanding Existing Tranche B-4 Term Loans and Repaid Tranche B-6 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 September 30, 2024. Pursuant to the Eleventh Amendment, the Applicable Margin is (i) 1.75% for the Replacement Term Loans that are SOFR Loans and (ii) 0.75% 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.

FAQ

What did GoDaddy announce on May 31, 2024?

GoDaddy announced the completion of refinancing and extension of its Tranche B-4 and Tranche B-6 term loans.

What is the new loan amount introduced by GoDaddy?

GoDaddy introduced a new $1 billion tranche of term loans maturing in 2031.

What are the new interest rates for GoDaddy's Replacement Term Loans?

The new interest rates are 1.75% for SOFR Loans and 0.75% for ABR Loans.

When is the first installment of GoDaddy's Replacement Term Loans due?

The first installment is due on or about September 30, 2024.

What changes were made to GoDaddy's loan maturity dates?

Loan maturity dates were extended to provide financial flexibility, with new loans maturing in 2031.