8-KMaterial AgreementsFinancial Events

DEXCOM INC 8-K Report, Material Agreement (Jun 20, 2016)

Filed June 20, 2016For Securities:DXCM

Summary

DexCom, Inc. (DXCM) announced on June 17, 2016, the execution of a significant $200 million revolving credit agreement with JPMorgan Chase Bank, N.A., and other financial institutions. This agreement provides DexCom with substantial financial flexibility for general corporate purposes, including working capital and capital expenditures. Notably, the company had no outstanding loans under this new facility as of the reporting date, indicating a strong initial cash position or reliance on other funding sources. The credit agreement features an accordion feature allowing DexCom to potentially increase the facility size by an additional $100 million, bringing the total potential credit line to $300 million, subject to lender approval. The terms include variable interest rates based on leverage ratios and a commitment fee on the unused portion of the facility. The agreement is secured by a pledge of substantially all of DexCom's assets and is guaranteed by its domestic subsidiaries, with covenants and default provisions customary for such financing.

Key Highlights

  • 1DexCom entered into a $200 million revolving credit agreement on June 17, 2016.
  • 2The credit facility is with JPMorgan Chase Bank, N.A. as administrative agent, and includes Bank of America, Silicon Valley Bank, and Union Bank.
  • 3As of June 17, 2016, DexCom had no outstanding borrowings under the new credit agreement.
  • 4The agreement allows for general corporate purposes, including working capital and capital expenditures.
  • 5DexCom has the option to increase the credit line by an additional $100 million, up to a total of $300 million.
  • 6The credit facility is secured by substantially all of DexCom's assets and guaranteed by its domestic subsidiaries.
  • 7The agreement includes customary covenants, events of default, and matures on June 17, 2021.

Frequently Asked Questions

The $200 million revolving credit agreement is intended for general corporate purposes, which includes supporting working capital needs and funding capital expenditures for DexCom.

No, as of the report date (June 17, 2016), DexCom had no outstanding loans or borrowings under this new $200 million credit facility.

Yes, DexCom has the option to increase the maximum principal amount available under the credit agreement by up to an additional $100 million, subject to lender approval, which would bring the total potential credit line to $300 million.

The obligations under the credit agreement are secured by a first-priority security interest in substantially all of DexCom's assets and those of its domestic subsidiaries. This includes equity interests of domestic and first-tier foreign subsidiaries, but excludes real property and intellectual property.