Summary
Adobe Systems Incorporated (ADBE) has filed an 8-K report detailing the execution of a new $1.0 billion senior unsecured revolving credit facility, replacing its previous agreement. This new facility, effective March 2, 2012, matures on March 2, 2017, and offers an option to increase the commitment by an additional $500 million, bringing the total potential credit line to $1.5 billion. The funds are designated for general corporate purposes, providing Adobe with financial flexibility for its operations and strategic initiatives. The terms of the new credit agreement include variable interest rates based on LIBOR or a base rate, plus a margin tied to Adobe's public debt ratings. Commitment fees also apply. Key covenants within the agreement include restrictions on liens and indebtedness, as well as a financial covenant limiting the maximum leverage ratio to 3 to 1. The termination of the prior credit facility and payoff of all associated obligations are also reported.
Key Highlights
- 1Adobe entered into a new five-year, $1.0 billion senior unsecured revolving credit facility dated March 2, 2012.
- 2The new credit facility has a maturity date of March 2, 2017.
- 3There is an option to increase the credit facility's aggregate commitment by an additional $500 million, up to a total of $1.5 billion.
- 4The facility will be used for general corporate purposes, providing financial flexibility.
- 5Interest rates are variable, based on LIBOR plus a margin (0.795% to 1.30%) or a base rate plus a margin (0.00% to 0.30%), dependent on Adobe's public debt ratings.
- 6A financial covenant restricts the maximum leverage ratio to 3 to 1.
- 7The company terminated and paid off all obligations under its previous credit agreement dated February 16, 2007.