Summary
On June 12, 2019, Automatic Data Processing, Inc. (ADP) announced the establishment of two new credit facilities totaling $6.55 billion, replacing previous credit agreements. This strategic move includes a $3.80 billion 364-day facility and a $2.75 billion five-year facility, with the latter having an accordion feature allowing for an additional $500 million. These facilities provide ADP with significant financial flexibility for general corporate purposes, including potential acquisitions or other strategic initiatives. The new credit arrangements demonstrate the company's strong access to capital markets and its ability to secure favorable financing terms. The company also maintained an existing $3.75 billion five-year credit agreement, ensuring robust liquidity. Key banks, including JPMorgan Chase and Bank of America, are acting as agents and bookrunners for these facilities, indicating strong institutional support.
Key Highlights
- 1ADP entered into two new credit agreements totaling $6.55 billion on June 12, 2019.
- 2The new facilities consist of a $3.80 billion 364-day credit agreement and a $2.75 billion five-year credit agreement.
- 3The five-year facility includes an accordion feature that allows for an increase of up to $500 million in commitments.
- 4These new facilities replace prior credit agreements that were terminated on the same day.
- 5The credit agreements provide for borrowings through a competitive advance option and a revolving credit option.
- 6Borrowings under these facilities can be used for general corporate purposes.
- 7The facilities are led by major financial institutions including JPMorgan Chase Bank, N.A., and Bank of America, N.A. as Joint Lead Arrangers and Joint Bookrunners.