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FCN > SEC Filings for FCN > Form 8-K on 29-Nov-2012All Recent SEC Filings

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Form 8-K for FTI CONSULTING INC


29-Nov-2012

Entry into a Material Definitive Agreement, Termination of a Material Definiti


Item 1.01 Entry into a Material Definitive Agreement.

Initial Purchase under Tender Offer for 2016 Notes

On November 27, 2012, FTI Consulting, Inc. ("FTI Consulting") announced that it has accepted for purchase approximately $128.3 million aggregate principal amount of its $215.0 million aggregate principal amount of 7 3/4% Senior Notes due 2016 (the "2016 Notes"), representing all such 2016 Notes that were validly tendered and not validly withdrawn at or prior to the consent payment deadline pursuant to FTI Consulting's cash offer previously announced on November 9, 2012 to purchase ("Tender Offer") any and all of its outstanding 2016 Notes. FTI Consulting also received consents from holders of the required majority of the principal amount of the 2016 Notes to, among other modifications, eliminate substantially all of the restrictive covenants and certain events of default and related provisions in the indenture dated as of October 3, 2006 (as amended and supplemented, the "2016 Notes Indenture") governing the 2016 Notes. In connection with the offer to purchase and consent solicitation, on November 27, 2012, FTI Consulting, the guarantors party thereto and Wilmington Trust Company, as trustee, entered into the Seventh Supplemental Indenture (the "Seventh Supplemental Indenture") to the 2016 Notes Indenture. A copy of the Seventh Supplemental Indenture is attached hereto as Exhibit 4.1 and is incorporated herein by reference.



Item 1.02 Termination of a Material Definitive Agreement.

In connection with entering into the 2012 Credit Agreement (as defined below), on November 27, 2012, FTI Consulting refinanced and replaced its existing Credit Agreement, dated as of September 27, 2010 (as amended and supplemented, the "2010 Credit Agreement"), by and among FTI Consulting, as borrower, the designated borrowers party thereto, the guarantors party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent, and related agreements and documents. The 2010 Credit Agreement provided for a five-year $250.0 million senior secured revolving line of credit. Outstanding borrowings and accrued interest under the 2010 revolving credit facility were paid in full substantially concurrently with the replacement of the 2010 Credit Agreement using net proceeds from the private offering of FTI Consulting's 2022 Notes (as defined below). FTI Consulting did not incur any early termination or prepayment penalties in connection with the replacement of the 2010 Credit Agreement.


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

Issuance of 2022 Notes and Entry into 2022 Notes Indenture

On November 27, 2012, FTI Consulting completed its previously announced private offering (the "Offering") of $300.0 million aggregate principal amount of 6.0% Senior Notes due 2022 (the "2022 Notes").

FTI Consulting used approximately $133.7 million of the net proceeds from the Offering to fund the purchase of the 2016 Notes, pay the accrued and unpaid interest of approximately $1.6 million on the purchased 2016 Notes and make the related consent payments. FTI Consulting used approximately $75.3 million of the net proceeds to repay outstanding principal and accrued interest under the 2010 Credit Agreement as of November 27, 2012. FTI Consulting expects to use the remaining net proceeds from the Offering to fund the purchase price of any additional 2016 Notes that are validly tendered pursuant to the Tender Offer and to redeem any and all of the 2016 Notes that remain outstanding following the consummation of the Tender Offer, as well as pay any accrued and unpaid interest and the related tender or redemption expenses.

The 2022 Notes were issued pursuant to an Indenture, dated as of November 27, 2012 (the "2022 Notes Indenture"), among FTI Consulting, the guarantors party thereto and U.S. Bank National Association, as trustee.

The 2022 Notes bear interest at the rate of 6.0% per annum, payable semi-annually in cash in arrears on November 15 and May 15 of each year, commencing on May 15, 2013. Each interest payment will be made to the persons who are registered holders of the 2022 Notes on the immediately preceding November 1 and May 1, respectively. The 2022 Notes will mature on November 15, 2022.

The obligations under the 2022 Notes are fully and unconditionally guaranteed, jointly and severally, by substantially all of FTI Consulting's existing, direct and indirect, domestic restricted subsidiaries and will be guaranteed by future, direct and indirect, domestic restricted subsidiaries of FTI Consulting, subject to certain exceptions.

The 2022 Notes and the guarantees are FTI Consulting's and the guarantors' general unsecured senior obligations. The indebtedness evidenced by the 2022 Notes and the guarantees (i) rank equally in right of payment with all of FTI Consulting's and the guarantors' existing and future senior indebtedness,
(ii) rank senior in right of payment to any existing and future subordinated indebtedness, (iii) are effectively junior to all of FTI Consulting's and the guarantors' secured debt, including borrowings under the 2012 Credit Agreement (as defined below), to the extent of the value of the collateral securing such indebtedness, and (iv) are structurally subordinated to all existing and future indebtedness and other liabilities of any current and future non-guarantor subsidiaries (other than indebtedness and liabilities owed to FTI Consulting or one of its guarantor subsidiaries).

At any time prior to November 15, 2017, FTI Consulting may redeem the 2022 Notes, in whole or in part, at a price equal to 100% of the principal amount plus an applicable "make-

. . .



Item 3.03 Material Modification to Rights of Security Holders.

Item 1.01. "Entry into a Material Definitive Agreement-Initial Purchase under
Tender Offer for 2016 Notes" is hereby incorporated by reference into this Item 3.03. "Material Modification to Rights of Security Holders."



ITEM 7.01 Regulation FD Disclosure

FTI Consulting also announced in its November 27, 2012 press release announcing the initial closing of the Tender Offer, a one-time pre-tax charge against 2012 fourth-quarter earnings, reflecting the estimated loss on early extinguishment of debt related to the Tender Offer and the subsequent redemption of all 2016 Notes that remain outstanding after giving effect to the consummation of the Tender Offer (the "Estimated Charge"). FTI Consulting expects the Estimated Charge to be approximately $5.0 million, which will reduce fully diluted earnings per share by $0.07. The final Estimated Charge will vary based upon, among other factors, whether any 2016 Notes that remain outstanding on the date hereof are purchased by FTI Consulting pursuant to the Tender Offer in respect of subsequent tenders made prior to the expiration time of the Tender Offer or are otherwise redeemed by the Company pursuant to the Company's notice of redemption issued on November 27, 2012.

This Current Report on Form 8-K contains "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, that are based upon management's beliefs, as well as assumptions made by and information currently available to management. All statements other than statements of historical fact included in this Current Report on Form 8-K, in particular statements regarding the estimated amount of the charge for early extinguishment of debt that will be recorded by FTI Consulting for the fourth quarter ending December 31, 2012, as well as statements identified by words such as "approximately," "estimates," "expects," "anticipates," "projects," "plans," "intends," "believes," "forecasts" and variations of such words or similar expressions, constitute forward-looking statements. All forward-looking statements are based upon FTI Consulting's expectations at the time we make them and various assumptions. FTI Consulting's expectations, beliefs and estimates are expressed in good faith, and it believes there is a reasonable basis for them. However, there can be no assurance that FTI Consulting's expectations, beliefs and estimates will result or be achieved or that actual results will not differ from estimates or expectations. Further, estimates of loss on early extinguishment of debt are subject to FTI Consulting's final review and the final review of FTI Consulting's independent public accounting firm. We are under no duty to update any of the forward-looking statements to conform such statements to actual results or events and do not intend to do so.



Item 8.01 Other Events.

On November 27, 2012, FTI Consulting issued a press release announcing that it has (i) accepted for purchase approximately $128.3 million aggregate principal amount of the 2016 Notes, representing all 2016 Notes that were validly tendered and not validly withdrawn at or prior to 5:00 p.m., New York City time, on November 26, 2012 pursuant to FTI Consulting's previously announced cash offer to purchase any and all of its outstanding 2016 Notes, (ii) received


sufficient consents to approve the proposed amendments to the 2016 Notes Indenture that, among other modifications, eliminate substantially all of the restrictive covenants and certain events of default in the 2016 Notes Indenture, and (iii) reported the estimated 2012 fourth quarter charge for loss on early extinguishment of debt.

In addition, on November 27, 2012, FTI Consulting issued a press release announcing that it has completed its previously announced private offering of $300.0 million aggregate principal amount of 2022 Notes.

In addition, on November 27, 2012, FTI Consulting issued a press release announcing that it has entered into the 2012 Credit Agreement, which refinances and replaces the 2010 Credit Agreement that was set to mature on September 27, 2015.

In addition, on November 27, 2012, FTI Consulting issued a press release announcing that it has elected to redeem any and all 2016 Notes that remain outstanding on December 27, 2012, after giving effect to the consummation of the Tender Offer.

Copies of the press releases are filed herewith as Exhibits 99.1, 99.2, 99.3 and 99.4, respectively, and are incorporated by reference herein.



Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit
  No.                                     Description

 4.1         Seventh Supplemental Indenture, dated as of November 27, 2012, among
             FTI Consulting, Inc., the guarantors party thereto and Wilmington
             Trust Company, as trustee, relating to FTI Consulting, Inc.'s 7  3/4%
             Senior Notes due 2016.

 4.2         Indenture, dated as of November 27, 2012, among FTI Consulting, Inc.,
             the guarantors party thereto and U.S. Bank National Association, as
             trustee, relating to FTI Consulting, Inc.'s 6.0% Senior Notes due
             2022.

 4.3         Form of 6.0% Senior Notes due 2022 (included in Exhibit 4.2).

 4.4         Form of Notation of Guarantee of 6.0% Senior Notes due 2022 (included
             in Exhibit 4.2).

 4.5         Registration Rights Agreement, dated November 27, 2012, among FTI
             Consulting, Inc., the guarantors party thereto and J.P. Morgan
             Securities LLC.

10.1         Credit Agreement, dated as of November 27, 2012, among FTI Consulting,
             Inc., the designated borrowers party thereto, the guarantors party
             thereto, the lenders party thereto, and Bank of America, N.A., as
             administrative agent. Exhibits and schedules (or similar attachments)
             to the Credit Agreement are not filed. FTI Consulting, Inc. will
             furnish supplementally a copy of any omitted exhibit or schedule to
             the Securities and Exchange Commission upon request.

10.2         Security Agreement, dated as of November 27, 2012, by and among
             grantors party thereto and Bank of America, N.A., as administrative
             agent. Exhibits and schedules (or similar attachments) to the Security
             Agreement are not filed. FTI Consulting, Inc. will furnish
             supplementally a copy of any omitted exhibit or schedule to the
             Securities and Exchange Commission upon request.

10.3         Pledge Agreement, dated as of November 27, 2012, by and among pledgors
             party thereto and Bank of America, N.A., as administrative agent.
             Exhibits and schedules (or similar attachments) to the Pledge
             Agreement are not filed. FTI Consulting, Inc. will furnish
             supplementally a copy of any omitted exhibit or schedule to the
             Securities and Exchange Commission upon request.

99.1         Press Release of FTI Consulting, Inc. dated November 28, 2012,
             announcing initial payment date for 2016 Notes Tender Offer, the
             results of the consent solicitation and the estimated charge for loss
             on early extinguishment of debt.

99.2         Press Release of FTI Consulting, Inc. dated November 28, 2012,
             announcing closing of 2022 Notes Offering.

99.3         Press Release of FTI Consulting, Inc. dated November 28, 2012,
             announcing 2012 Credit Agreement.

99.4         Press Release of FTI Consulting, Inc. dated November 28, 2012,
             announcing redemption of 2016 Notes remaining outstanding after
             expiration of Tender Offer.


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