Summary
Automatic Data Processing, Inc. (ADP) announced on June 24, 2011, the execution of two new credit agreements, a $2 billion 364-day facility and a $3.25 billion four-year facility. These new credit lines replace existing facilities and collectively offer a significant borrowing capacity for the company's general corporate purposes. The four-year facility includes an accordion feature allowing for an additional $500 million increase, bringing its potential size to $3.75 billion.
Key Highlights
- 1ADP entered into a $2 billion 364-day credit facility and a $3.25 billion four-year credit facility.
- 2The new facilities replace the company's prior $2.5 billion 364-day and $2.25 billion five-year facilities.
- 3The four-year facility has an accordion feature allowing for an increase of up to $500 million.
- 4Borrowings can be made through competitive advance or revolving credit options.
- 5Interest rates are tied to market benchmarks like LIBOR and the Alternate Base Rate, with pricing influenced by the Markit CDX North American Investment Grade Index and the company's credit ratings.
- 6The company will pay commitment fees on unused portions of the facilities.
- 7The facilities include customary covenants and events of default, similar to those in the replaced agreements.