Summary
Automatic Data Processing, Inc. (ADP) announced on June 23, 2014, that it entered into two new credit agreements on June 18, 2014: a $2.25 billion 364-Day Credit Agreement and a $3.25 billion Five-Year Credit Agreement. These facilities replace previous credit lines and provide ADP with substantial liquidity for general corporate purposes. The new agreements offer flexible borrowing options, including competitive advance and revolving credit facilities, with various interest rate mechanisms and options for currency and tenor.
Key Highlights
- 1ADP has secured a new $2.25 billion 364-day credit facility and a $3.25 billion five-year credit facility.
- 2The new facilities replace previously existing credit agreements, indicating a refinancing or restructuring of its debt.
- 3The Five-Year Facility includes an accordion feature allowing for an increase in commitment by up to $500 million to $3.75 billion.
- 4Borrowing options include competitive advances via an auction mechanism and committed revolving credit.
- 5Interest rates on revolving loans are tied to LIBOR, prime rates, federal funds rates, or CDOR rates, with flexibility in tenor selection.
- 6Commitment fees are applicable, with rates varying based on the facility and, for the Five-Year Facility, ADP's issuer rating.
- 7The agreements contain customary covenants and events of default similar to the replaced facilities, providing a level of predictability for investors.