8-KMaterial AgreementsFinancial EventsExhibits & Filings

FAIR ISAAC CORP 8-K Report, Material Agreement (May 13, 2008)

Filed May 13, 2008For Securities:FICO

Summary

Fair Isaac Corporation (FICO) announced on May 13, 2008, that it has successfully completed a private placement of $275 million in senior unsecured notes. These notes are structured across four series with varying maturity dates and interest rates, ranging from 6.37% to 7.18%. The primary intended use of these proceeds is for refinancing existing debt obligations, with potential allocation for other general corporate purposes. This debt issuance introduces new financial covenants, including a minimum fixed charge coverage ratio of 2.50:1.00 and a maximum consolidated indebtedness to EBITDA ratio of 3.00:1.00. The agreement also contains standard covenants for unsecured credit facilities and default provisions, such as those triggered by a change of control or default on other debt exceeding $25 million, which could lead to accelerated repayment of the principal. Investors should note the scheduled mandatory prepayments for Series B notes, starting in May 2011.

Key Highlights

  • 1FICO issued $275 million in senior unsecured notes through a private placement.
  • 2Proceeds are earmarked for refinancing existing debt and general corporate purposes.
  • 3Notes are issued in four series with maturities ranging from May 2013 to May 2018.
  • 4Interest rates on the notes vary by series, from 6.37% to 7.18%.
  • 5New financial covenants require a fixed charge coverage ratio of at least 2.50:1.00 and a debt-to-EBITDA ratio of no more than 3.00:1.00.
  • 6The Note Purchase Agreement includes provisions for optional prepayments and mandatory prepayments for Series B notes.
  • 7Default events, including change of control or material default on other debt, can trigger immediate repayment of all outstanding obligations.

Frequently Asked Questions

The primary stated purpose of the $275 million senior unsecured notes issuance is to refinance existing debt obligations. The proceeds may also be used for other general corporate purposes.

FICO must maintain a fixed charge coverage ratio of not less than 2.50 to 1.00 and a consolidated indebtedness to EBITDA ratio of not more than 3.00 to 1.00. The agreement also contains other typical covenants for unsecured credit facilities.

The Note Purchase Agreement includes customary default provisions. If an event of default occurs, such as a change of control of the Company or a default on other debt exceeding $25 million, all outstanding obligations under these Senior Notes may become immediately due and payable.

Yes, the Company is required to make mandatory prepayments of $8 million principal amount on the Series B Senior Notes on May 7th of each year from 2011 through 2014. Optional prepayments are also permitted, subject to certain limitations and a make-whole payment.