Item 8.01 Other Events.
Grand Canyon Education, Inc., a Delaware corporation (the “Company”) is a publicly traded education services company dedicated to serving colleges and universities. The Company’s most significant university partner is Grand Canyon University (“GCU”), an Arizona non-profit corporation that operates a comprehensive regionally accredited university that offers graduate and undergraduate degree programs, emphases and certificates across ten colleges both online and on ground at its campus in Phoenix, Arizona and at eight off-campus classroom and laboratory sites.
As previously reported, 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 was October 1, 2026 and under the NBAZ Loan Agreement was April 1, 2025. The Loan Agreements provided 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. In connection with the foregoing, 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 pledged 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.
On December 5, 2024, GCU consummated a new bond financing in the aggregate principal amount of $520.0 million and, as part of the use of proceeds thereof, repaid all amounts due under the Loan Agreements. As a result, the Pledge Agreements between the Company and the Banks, and all obligations of the Company thereunder, terminated in accordance with their terms and the Company’s cash collateral was released.
