Summary
Cisco Systems, Inc. (CSCO) has entered into a Third Amended and Restated Credit Agreement on February 2, 2024, establishing a $5.0 billion unsecured revolving credit facility. This facility, which can be expanded up to $7.0 billion and has an initial maturity of five years with options for extension, provides significant financial flexibility. The agreement outlines various borrowing options including U.S. dollar loans tied to Term SOFR or Base Rate, and foreign currency loans. It also includes a commitment fee on the undrawn amount and fees for outstanding letters of credit, with terms influenced by Cisco's senior debt credit ratings.
Key Highlights
- 1Cisco entered into a new $5.0 billion unsecured revolving credit facility with Bank of America, N.A. as administrative agent.
- 2The credit facility has a five-year term and can be increased up to an aggregate of $7.0 billion.
- 3The facility includes sublimits for letters of credit ($250 million), swingline loans ($250 million), and foreign currency borrowings ($1.0 billion).
- 4Interest rates are variable and tied to Cisco's senior debt credit ratings, with options for Term SOFR, Term SOFR Daily Floating Rate, Base Rate for USD loans, and various foreign currency rates (EURIBOR, TIBOR, SONIA).
- 5Cisco also has the option to extend the maturity of the credit facility for an additional year, up to two times.
- 6A financial covenant requires Cisco to maintain a consolidated EBITDA to consolidated interest expense ratio of not less than 3.0 to 1.0.
- 7Separately, Cisco has increased the size of its commercial paper program from $10 billion to $15 billion.