Summary
Salesforce, Inc. (CRM) filed an 8-K on October 6, 2014, to report the entry into a new Credit Agreement. This agreement establishes a $650 million revolving loan facility maturing on October 6, 2019, replacing the previous credit agreement dated July 11, 2013. Upon closing, Salesforce borrowed $300 million under the new facility, using a significant portion to repay outstanding debt from the old agreement. The new credit facility offers flexibility for working capital, capital expenditures, and strategic initiatives like acquisitions. The interest rates are variable, based on either a base rate or an adjusted LIBOR rate, with spreads determined by Salesforce's consolidated leverage ratio. The agreement also includes customary covenants and events of default, requiring Salesforce to maintain specific financial ratios. The primary guarantor at closing was ExactTarget, Inc.
Key Highlights
- 1Entry into a new $650 million revolving credit facility maturing in October 2019.
- 2Immediate borrowing of $300 million under the new facility.
- 3Repayment of $263 million of debt under the previous credit agreement.
- 4Flexibility to use proceeds for working capital, capital expenditures, and permitted acquisitions.
- 5Variable interest rates based on leverage ratios, with options for base rate or adjusted LIBOR.
- 6Inclusion of affirmative and negative covenants, including financial ratio maintenance (leverage and interest coverage).
- 7ExactTarget, Inc. is identified as the sole guarantor at the time of closing.