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UNITED STATES
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
Date of Report (Date of earliest event reported): August 14, 2006
VISTEON CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware
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1-15827
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38-3519512 |
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.) |
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One Village Center Drive, Van Buren Township, Michigan |
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48111 |
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(Address of principal executive offices)
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(Zip Code) |
Registrants telephone number, including area code (800)-VISTEON
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:
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Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
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TABLE OF CONTENTS
SECTION 1 REGISTRANTS BUSINESS AND OPERATIONS
Item 1.01. Entry into a Material Definitive Agreement.
The information set forth under Item 2.03 below is incorporated herein by reference.
Item 1.02. Termination of a Material Definitive Agreement.
The information set forth under Item 2.03 below is incorporated herein by reference.
SECTION 2 FINANCIAL INFORMATION
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
On August 14, 2006, Visteon Corporation (the Company) entered into a Credit Agreement (the
Credit Agreement) with a syndicate of financial institutions, including JPMorgan Chase Bank,
N.A., as administrative agent, Citicorp USA, Inc., as syndication agent, and Bank of America, NA,
Sumitomo Mitsui Banking Corporation, New York and Wachovia Capital Finance Corporation (Central),
as documentation agents, which provides for up to $350 million in secured revolving loans. The
Company borrowed $25 million upon closing, which will be used for general corporate purposes. The
Credit Agreement expires on or prior to August 14, 2011.
Subject to limited exceptions, each of the Companys direct and indirect, existing and future,
domestic subsidiaries are borrowers under the Credit Agreement. The obligations under the Credit
Agreement are secured by a first-priority lien on certain assets of the Company and most of its
domestic subsidiaries, including real property, accounts receivable, inventory, equipment and other
tangible and intangible property, including the capital stock of nearly all direct and indirect
domestic subsidiaries (other than those domestic subsidiaries the sole assets of which are capital
stock of foreign subsidiaries), as well as a second-priority lien on substantially all other
material tangible and intangible assets of the Company and most of its domestic subsidiaries which
secure the Companys term loan agreement entered into on June 13, 2006. The terms relating to the
Credit Agreement specifically limit the obligations to be secured by a security interest in certain
U.S. manufacturing properties and intercompany indebtedness and capital stock of U.S. manufacturing
subsidiaries in order to ensure that, at the time of any borrowing under the Credit Agreement and
other credit lines, the amount of the applicable borrowing which is secured by such assets
(together with other borrowings which are secured by such assets and obligations in respect of
certain sale-leaseback transactions) do not exceed 15% of Consolidated Net Tangible Assets (as
defined in the indenture applicable to the Companys outstanding bonds and debentures).
The Credit Agreement contains, among other things, mandatory prepayment provisions for certain
asset sales, recovery events, equity issuances and debt incurrence, covenants, representations and
warranties and events of default customary for facilities of this type. Such covenants include
certain restrictions on the incurrence of additional indebtedness, liens,
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acquisitions and other investments, mergers, consolidations, liquidations and dissolutions,
sales of assets, dividends and other repurchases in respect of capital stock, voluntary prepayments
of certain other indebtedness, capital expenditures, transactions with affiliates, changes in
fiscal periods, hedging arrangements, lines of business, negative pledge clauses, subsidiary
distributions and the activities of certain holding company subsidiaries, subject to certain
exceptions.
Under certain conditions amounts outstanding under the Credit Agreement may be accelerated.
Bankruptcy and insolvency events with respect to us or certain of our subsidiaries will result in
an automatic acceleration of the indebtedness under the Credit Agreement. Subject to notice and
cure periods in certain cases, other events of default under the Credit Agreement will result in
acceleration of indebtedness under the Credit Agreement at the option of the lenders. Such other
events of default include failure to pay any principal, interest or other amounts when due, failure
to comply with covenants, breach of representations or warranties in any material respect,
non-payment or acceleration of other material debt, entry of material judgments not covered by
insurance, or a change of control of the Company.
Also on August 14, 2006, certain European subsidiaries of the Company closed on a committed
5-year trade accounts receivables facility that can provide up to $325 million in funding. Under
the facility, the participating subsidiaries have committed to sell trade receivables at their face
value to an unconsolidated, insolvency-remote special purpose entity incorporated under the laws of
Ireland and referred to as the master purchaser (or, in the case of receivables governed by French
law, a special French law securitization vehicle known as a fonds commun de créances or FCC
that in turn will issue secured notes to the master purchaser).
The master purchaser finances its purchase of receivables (and secured notes) through the
issuance of variable loans provided by a syndicate of lenders as well as subordinated loans
provided by Visteon Netherlands Finance B.V., an indirect, wholly owned subsidiary of the Company
organized under the laws of the Netherlands. The Company expects that the face amount of
receivables financed from time to time by the syndicate of lenders will be treated as having been
sold by the Company and its consolidated subsidiaries for financial statement purposes.
The actual amount of third-party funding available under the facility from time to time is
based upon the outstanding balance of trade accounts receivable of the participating subsidiaries
at such time, reduced by a factor that reflects estimated losses on the receivables. Certain
receivables are ineligible for financing based on factors such as the creditworthiness of the
obligor, delinquency of the receivable and excess obligor concentrations. The aggregate of the
face value of ineligible receivables, the discount applied to the face value of eligible
receivables by the lenders and the excess of available third party funding over desired borrowing
levels from time to time is the amount that is financed by the master purchaser through the
subordinated loan from Visteon Netherlands Finance B.V.
Certain conditions to inclusion of receivables governed by French law, including, principally,
the formation of the FCC, have not yet been satisfied. While those conditions are largely
ministerial and are expected to be completed later this year, there is no assurance that will be
the case and unless and until such conditions are satisfied, total availability under the
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facility will be significantly reduced. As of the closing date of the facility, total
availability was approximately $82.5 million and no amounts had been drawn. The facility provides
funding in U.S. dollars, Euro and Pound Sterling based on the currency of payment of the underlying
receivables.
Receivables sold to the master purchaser in connection with the facility will continue to be
serviced by the Visteon entities that originated those receivables. In connection with the
facility, the Company has provided an undertaking in favor of the lenders to support the servicing
and other performance obligations of the European subsidiaries under the facility.
On August 14, 2006, the Company also terminated its Second Amended and Restated Credit
Agreement, dated as of January 9, 2006 as amended (the Restated Credit Agreement).
The Companys press release relating to the foregoing is attached hereto as Exhibit 99.1 and
is incorporated herein by reference.
Some of the financial institutions party to the Credit Agreement and other transaction
described above and their affiliates have performed, and may in the future perform, various
commercial banking, investment banking, brokerage, trustee and other financial advisory services in
the ordinary course of business for the Company and its subsidiaries for which they have received,
and will receive, customary fees and commissions.
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SECTION 9 FINANCIAL STATEMENTS AND EXHIBITS
Item 9.01. Financial Statements and Exhibits.
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99.1 |
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Press release dated August 15, 2006. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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VISTEON CORPORATION
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Date: August 18, 2006 |
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/s/ James F. Palmer
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James F. Palmer |
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Executive Vice President and
Chief Financial Officer |
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EXHIBIT INDEX
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Exhibit No. |
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Description |
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99.1
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Press Release dated August 15, 2006. |
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