Summary
Automatic Data Processing, Inc. (ADP) announced on June 27, 2007, the execution of a new $1.75 billion 364-day credit facility. This new facility replaces a similar expiring credit line and is structured with two borrowing options: a competitive advance option utilizing an auction mechanism and a committed revolving credit option. The lenders' commitments expire on June 25, 2008, with borrowings due on that date, or potentially extended to June 25, 2009, at ADP's discretion and subject to certain conditions. The primary purpose of this facility is to provide financial flexibility for general corporate purposes. The terms and covenants are substantially similar to the previous facility, including standard restrictions on liens, sale-leaseback transactions, and asset transfers, as well as customary events of default. This refinancing demonstrates ADP's ongoing access to credit markets and its commitment to maintaining adequate liquidity.
Key Highlights
- 1ADP entered into a new $1.75 billion 364-day credit agreement on June 27, 2007.
- 2The new facility replaces a prior $1.75 billion 364-day facility that expired on the same date.
- 3The credit agreement provides for two borrowing options: a competitive advance option and a revolving credit option.
- 4Lender commitments under the new facility expire on June 25, 2008, with potential extension to June 25, 2009.
- 5Borrowings under the facility can be used for general corporate purposes.
- 6The terms and covenants are substantially similar to the replaced facility, including customary restrictions and events of default.
- 7JPMorgan Chase Bank, N.A. and Bank of America, N.A. serve as Administrative Agent and Syndication Agent, respectively.