Summary
Applied Materials, Inc. (AMAT) announced on September 25, 2025, the execution of a new 364-day revolving credit facility totaling $2.0 billion, with an option to expand the facility to $3.0 billion. This new credit agreement, established with Bank of America, N.A. as the administrative agent, provides the company with significant financial flexibility for general corporate purposes. The facility offers flexible interest rate options, including SOFR-based or prime rate options, with margins and commitment fees tied to Applied Materials' public debt credit ratings. A key financial covenant requires the company to maintain a consolidated adjusted EBITDA to consolidated net interest expense ratio of no less than 3.00 to 1.00, indicating a focus on maintaining a healthy debt servicing capability. The agreement also includes provisions for an extension of the maturity date, offering further operational and financial planning advantages.
Key Highlights
- 1Entered into a new $2.0 billion 364-day unsecured revolving credit facility.
- 2Option to increase the total revolving credit facility to $3.0 billion.
- 3Interest rates tied to SOFR or prime rate, with margins dependent on credit ratings.
- 4Commitment fees on unused portions range from 0.04% to 0.10% based on credit ratings.
- 5Key financial covenant: consolidated adjusted EBITDA to consolidated net interest expense ratio of at least 3.00:1.00.
- 6Maturity date of September 24, 2026, with an option to convert outstanding loans to term loans maturing September 24, 2027.
- 7Proceeds are available for general corporate purposes.