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Subsequent Event | 9 Months Ended
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Sep. 30, 2024
Subsequent Event. |
Subsequent Event | 11. Subsequent Event On October 1, 2024, GCU entered into certain loan agreements (the “Loan Agreements”) with MidFirst Bank, a federally chartered savings association (“MidFirst”), and Zions Bancorporation, N.A., dba National Bank of Arizona, (“NBAZ” and, together with MidFirst, the “Banks”), pursuant to which each Bank made loans to GCU in the original amount of $250.0 million ($500.0 million in the aggregate) (each, a “Loan” and, collectively, the “Loans”). The proceeds of the Loans were used by GCU to refinance outstanding bonds originally issued in 2021. The stated maturity date under the MidFirst Loan Agreement is October 1, 2026 and under the NBAZ Loan Agreement is April 1, 2025. The Loan Agreements provide for customary events of default and remedies. As a condition to the making of the Loans, each Bank required GCU to provide cash collateral in an amount equal to the principal balance of the Loan it provided. At the time of the making of the Loans, GCU provided $300.0 million of its cash as collateral and the Company offered to use some of its cash to provide the remaining collateral necessary for GCU to secure the Loans. Accordingly, on October 1, 2024, the Company entered into (i) a Pledge and Security Agreement, by and between the Company and MidFirst, and (ii) a Security Agreement, by and between the Company and Zions (collectively, the “Pledge Agreements”), pursuant to which, among other things, the Company agreed to pledge to each of MidFirst and Zions $100.0 million of the Company’s available cash in order to partially secure the obligations of GCU under each Loan Agreement. The Pledge Agreements generally require that, so long as the time for payment of the indebtedness incurred by GCU under the Loan Agreements has not been stayed, enjoined or prevented for any reason, each Bank will exhaust its rights and remedies against GCU prior to exercising its rights against the Company’s collateral under the Pledge Agreement s. The Pledge Agreements will terminate upon the earlier of (a) in the case of the MidFirst Loan, repayment by GCU of at least $100.0 million of the Loan or GCU’s pledge of $100.0 million in cash collateral in substitution of the Company’s cash collateral, and (b) in the case of NBAZ, payment in full of all indebtedness due and owing under Loan Agreement or GCU’s pledge of $100.0 million in cash collateral in substitution of the Company’s cash collateral. All income earned on the Company’s cash collateral under the Pledge Agreements will be for the benefit of the Company. GCU has agreed to indemnify the Company for any claims, losses, liabilities and expenses arising out of Pledge Agreements (including the value of any collateral against which MidFirst or NBAZ has exercised remedies, out of pocket expenses, costs and disbursements and reasonable and documented attorney’s fees), except to the extent the claims, liabilities or expenses are finally judicially determined by a court of competent jurisdiction to have resulted from the Company’s or any of its affiliates’ gross negligence or willful misconduct. In the event that the terms of any of the Loan Agreements or Pledge Agreements prevent GCU from making any indemnity payment required by the preceding sentence, GCU shall make such payment immediately upon the removal of such restriction. The foregoing description of the Pledge Agreements does not purport to be complete and is qualified in its entirety by the full text of the Pledge Agreements, copies of which will be timely filed as an exhibit to the Company’s upcoming Annual Report on Form 10-K in accordance with applicable rules and regulations of the Securities and Exchange Commission.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 855 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/855/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 855 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147483399/855-10-50-2 + Details
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