Summary
Automatic Data Processing, Inc. (ADP) announced on June 15, 2016, the execution of new credit agreements, establishing a $3.25 billion 364-day facility and a $3.75 billion five-year facility. These new agreements replace prior credit facilities and enhance ADP's financial flexibility. The five-year facility includes an accordion feature allowing for an additional $500 million in commitments, potentially increasing its total capacity to $4.25 billion. These facilities provide ADP with significant borrowing capacity for general corporate purposes. The structure includes both competitive advance and revolving credit options, offering flexibility in how funds are accessed and managed. The terms and conditions, including interest rates and commitment fees, are detailed, reflecting market standards and ADP's credit profile. This strategic refinancing demonstrates the company's proactive approach to managing its capital structure and ensuring access to liquidity.
Key Highlights
- 1Entered into a $3.25 billion 364-Day Credit Agreement and a $3.75 billion Five-Year Credit Agreement on June 15, 2016.
- 2The Five-Year Facility includes an accordion feature, allowing for potential expansion by $500 million to $4.25 billion.
- 3The new facilities replace the company's prior 364-day and five-year credit agreements, which were terminated on the same date.
- 4Borrowings under the facilities can be used for general corporate purposes.
- 5Both facilities offer competitive advance and revolving credit options for flexible borrowing.
- 6The Five-Year Facility has maturity on June 15, 2021, with options for annual extensions.
- 7Key financial institutions including JPMorgan Chase, Bank of America, and others are involved as agents and lenders.