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May 06, 2013 – Comments (0) | RELATED TICKERS: EVTC , JPM , GS

Debt Refinancing is going to increase its earnings by $29.6M in interest savings from prior year.

For the quarter ended March 31, 2013 Adjusted Net Income was $27.5 million ($0.36 per diluted share), representing an increase of 37% as compared to $20.1 million ($0.26 per diluted share) in the prior year. The increase in Adjusted Net Income was primarily driven by the same factors impacting Adjusted EBITDA and lower pro forma cash interest expense as a result of the refinancing described in greater detail below.

Recent Developments

Initial Public Offering. On April 17, 2013, EVERTEC successfully completed its initial public offering (“IPO”) of 28.8 million shares of common stock at $20.00 per share. The offering included 6.3 million primary shares sold by EVERTEC and 22.5 million secondary shares sold by certain stockholders of the Company. Net proceeds to the Company of approximately $117.4 million from the offering were used to redeem $91.0 million aggregate principal amount of the 11% senior notes due 2018 issued by two of EVERTEC’s subsidiaries and pay transaction related fees and expenses.

Debt Refinancing. Concurrent with its IPO, EVERTEC’s subsidiary entered into $800.0 million of new senior secured credit facilities comprised of a $100 million revolving credit facility (undrawn at close), $300 million term loan A, and $400 million term loan B. Net proceeds from the loans were used to refinance all of the Company’s outstanding indebtedness under its existing senior secured credit facilities and to redeem the portion of the 11% senior notes due 2018 that remained outstanding after the application of net primary IPO proceeds, as described above. Pro forma for the refinancing, EVERTEC will reduce its annual interest expense by approximately 55% or $29.6 million per annum.

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