8-KMaterial AgreementsExhibits & Filings

APPLIED MATERIALS INC /DE 8-K Report, Material Agreement (Dec 22, 2014)

Filed December 22, 2014For Securities:AMAT

Summary

Applied Materials, Inc. (AMAT) filed an 8-K on December 22, 2014, reporting on an amendment to its Credit Agreement in connection with its proposed business combination with Tokyo Electron Limited (TEL). The amendment, dated December 19, 2014, waives certain defaults related to the business combination and modifies financial covenants and the termination date of the credit facility. Specifically, the amendment allows for the exclusion of certain subordinated intercompany debt from financial covenant calculations and permits its prepayment or repayment. The termination date of the U.S.$1,500,000,000 credit agreement was extended to one year after the consummation of the business combination. Applied Materials intends to replace the undrawn revolving credit facility before this new termination date.

Key Highlights

  • 1Amendment to a U.S.$1.5 billion Credit Agreement executed on December 19, 2014.
  • 2Amendment is in anticipation of the proposed business combination with Tokyo Electron Limited (TEL).
  • 3Waiver granted for defaults arising from the TEL business combination.
  • 4Financial covenant calculations will exclude certain subordinated intercompany debt.
  • 5Termination date of the Credit Agreement extended to one year post-business combination.
  • 6Company plans to replace the undrawn revolving credit facility within the extended period.

Frequently Asked Questions

This 8-K filing announces an amendment to Applied Materials' U.S.$1.5 billion Credit Agreement. The amendment addresses terms related to the company's proposed business combination with Tokyo Electron Limited, including waiving certain defaults and modifying financial covenants and the agreement's termination date.

The amendment waives potential defaults stemming from the business combination with TEL. It also modifies the termination date of the Credit Agreement to one year after the business combination's completion and allows for specific intercompany debt to be excluded from covenant calculations and repaid. Applied Materials plans to secure a replacement credit facility before the extended termination date.

Excluding subordinated intercompany debt from the calculation of financial covenants provides Applied Materials with more flexibility in meeting its debt obligations under the Credit Agreement, especially during and after the proposed business combination with TEL. This can be crucial for maintaining compliance with loan terms.

The termination date of the Credit Agreement is now set to be the one-year anniversary of the consummation of the business combination with Tokyo Electron Limited.