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CADENCE DESIGN SYSTEMS INC 8-K Report, Material Agreement (Jul 1, 2021)

Reports
Material Agreements·Financial Events·Exhibits & Filings
Filing Date
Filed July 1, 2021
Period End
June 30, 2021
Security
CDNS
In the record · 2016–202610-K1210-Q328-K98

CDNS filed 12 annual reports (10-K), 32 quarterly reports (10-Q) and 98 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Feb ’16Feb ’16
  2. Leadership change8-K · May ’20May ’20
  3. Leadership change8-K · May ’26May ’26

01—Abstract

Summary

Summary of the 8-K filed July 1, 2021. Cited figures are marked; the original filing is the authoritative source.

Cadence Design Systems, Inc. (CDNS) announced on June 30, 2021, the establishment of a new $700 milliona, five-year senior unsecured revolving credit facility.

This new facility replaces their previous credit agreement dated January 30, 2017. The primary purpose of this new credit line is to support general corporate purposes, providing Cadence with enhanced financial flexibility. An important feature of this new agreement is the provision allowing Cadence to increase the aggregate principal amount of revolving commitments by up to an additional $350 millionb, potentially bringing the total facility size to $1.050 billion.

This offers significant room for future growth and strategic initiatives. The new facility includes customary covenants, such as restrictions on additional secured indebtedness and liens, as well as a financial covenant requiring a funded debt to EBITDA ratio not to exceed 3.25 to 1, with flexibility for a higher ratio following significant acquisitions.

02—Key points

Key Highlights

  1. New $700 million, five-year senior unsecured revolving credit facility established.
  2. Facility can be expanded by up to $350 million, for a total potential of $1.050 billion.
  3. Replaces the existing credit agreement dated January 30, 2017.
  4. Proceeds are designated for general corporate purposes, indicating flexibility.
  5. Interest rates are based on LIBOR or base rate plus a margin, varying with credit rating.
  6. Commitment fees on undrawn amounts also vary based on credit rating.
  7. Includes customary negative covenants and a financial covenant on funded debt to EBITDA ratio (initially 3.25:1, with a step-up provision for acquisitions).

03—Questions

Frequently Asked Questions

  1. What is the purpose of the new credit facility?

    The new $700 million credit facility is intended for general corporate purposes, providing Cadence Design Systems with financial flexibility for its ongoing operations and strategic initiatives.

  2. How much can Cadence borrow under this new facility?

    The initial principal amount of the revolving credit facility is $700 million. However, Cadence has the option to increase the aggregate principal amount of revolving commitments by up to an additional $350 million, bringing the total potential borrowing capacity to $1.050 billion.

  3. What are the key financial covenants associated with the new credit facility?

    The agreement includes customary negative covenants restricting additional secured indebtedness and liens. It also features a financial covenant requiring Cadence to maintain a funded debt to EBITDA ratio not greater than 3.25 to 1. This ratio can step up to 3.75 to 1 for one year following a qualifying acquisition of at least $250 million.

  4. Does this new credit facility replace any previous agreements?

    Yes, this new five-year credit facility, entered into on June 30, 2021, terminates Cadence's existing Credit Agreement dated January 30, 2017.

04—Continue

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