8-KMaterial AgreementsFinancial EventsExhibits & Filings

EQUIFAX INC 8-K Report, Material Agreement (Oct 1, 2018)

Filed October 1, 2018For Securities:EFX

Summary

Equifax Inc. (EFX) has announced the execution of a new $1.1 billion five-year revolving credit facility, referred to as the "Revolver," which became effective on September 27, 2018. This new facility replaces the company's previous $900 million credit line and provides enhanced liquidity. The Revolver's terms are largely consistent with the prior agreement, including a maximum leverage ratio covenant of 3.5 to 1.0, with a potential increase to 4.0 to 1.0 under specific conditions, which are tested quarterly. This proactive refinancing demonstrates Equifax's commitment to maintaining a strong liquidity position following a period of significant operational challenges. While the financial and non-financial covenants are substantially similar to the previous facility, the increased size and extended maturity offer greater financial flexibility. Investors should note that borrowings under the Revolver are unsecured and rank pari passu with other senior unsecured debt. The interest rate and commitment fees are subject to adjustments based on Equifax's credit ratings.

Key Highlights

  • 1Equifax entered into a new $1.1 billion, five-year revolving credit facility (the "Revolver") on September 27, 2018.
  • 2The new Revolver replaces the company's previous $900 million revolving credit facility.
  • 3Key financial covenant requires maintaining a maximum leverage ratio of 3.5x consolidated funded debt to consolidated EBITDA, with a step-up to 4.0x under certain conditions.
  • 4The Revolver includes standard financial and non-financial covenants typical for corporate credit facilities.
  • 5Borrowings under the Revolver are unsecured and rank on parity with other senior unsecured indebtedness.
  • 6Interest rates and commitment fees are subject to adjustment based on Equifax's debt ratings.
  • 7The termination of the existing credit facility occurred concurrently with the entry into the new Revolver.

Frequently Asked Questions

The primary purpose of the new $1.1 billion revolving credit facility (the "Revolver") is to provide Equifax Inc. with enhanced liquidity and financial flexibility. It replaces an existing, smaller credit facility, offering a larger borrowing capacity and a five-year term.

The most significant financial covenant is the maintenance of a maximum leverage ratio, defined as consolidated funded debt divided by consolidated EBITDA, of not more than 3.5 to 1.0. This ratio can increase to 4.0 to 1.0 if certain conditions are met. This covenant is tested on a quarterly basis.

The new Revolver is unsecured and ranks equally with other senior unsecured debt of Equifax. By refinancing its existing facility with a larger one, Equifax is ensuring continued access to significant borrowing capacity, which is crucial for ongoing operations and potential strategic initiatives.

The terms of the new Revolver are substantially the same as the previous credit facility, including the inclusion of various financial and non-financial covenants. The main differences are the increased size of the facility ($1.1 billion vs. $900 million) and its five-year term.