Summary
Analog Devices, Inc. (ADI) has entered into a Third Amended and Restated Credit Agreement, updating its existing revolving credit facility. This new agreement provides for a 5-year revolving credit facility that can be expanded from $1.25 billion to $2.5 billion upon the completion of the acquisition of Maxim Integrated Products, Inc., expected by January 12, 2022. The facility, which expires on June 23, 2026, is currently undrawn and includes options for two one-year extensions. Key features of the new credit agreement include flexibility in borrowing types (Eurocurrency Rate Loans or Base Rate Loans), variable interest rates and facility fees tied to the company's Debt Ratings, and a sustainability-linked pricing component that adjusts rates based on environmental targets such as greenhouse gas emissions and renewable energy usage. The agreement also includes customary covenants and events of default, with a financial covenant requiring a funded debt to EBITDA ratio of no greater than 3.50:1.00, which can be temporarily increased to 4.00:1.00 following qualifying acquisitions exceeding $500 million.
Key Highlights
- 1ADI has established a new 5-year revolving credit facility maturing on June 23, 2026.
- 2The facility's aggregate principal amount can increase from $1.25 billion to $2.5 billion upon successful completion of the Maxim Integrated Products, Inc. acquisition.
- 3The credit agreement includes sustainability-linked pricing, incentivizing ADI to meet environmental targets.
- 4Interest rates and facility fees are variable, based on ADI's credit ratings and loan type (Eurocurrency or Base Rate).
- 5The company has covenants, including a maximum funded debt to EBITDA ratio of 3.50:1.00, with provisions for temporary increases related to acquisitions.
- 6The facility is currently undrawn, providing financial flexibility.
- 7The agreement allows for two one-year extension options, subject to lender consent.