8-KMaterial AgreementsFinancial EventsExhibits & Filings

FAIR ISAAC CORP 8-K Report, Material Agreement (Dec 31, 2014)

Filed December 31, 2014For Securities:FICO

Summary

Fair Isaac Corporation (FICO) announced on December 30, 2014, that it entered into an Amended and Restated Credit Agreement, establishing a new unsecured $400 million, five-year revolving credit facility. This facility, which can be expanded to $500 million under certain conditions, provides FICO with significant financial flexibility for general corporate purposes, working capital, potential debt refinancing, permitted acquisitions, and share repurchases. The agreement, with Wells Fargo Bank, National Association, as administrative agent, includes terms based on a choice of either a base rate or an adjusted Eurodollar rate, with applicable margins tied to FICO's total leverage ratio. Key financial covenants, such as a fixed charge coverage ratio of at least 2.50 to 1.00 and a total leverage ratio not exceeding 3.00 to 1.00 (with a potential step-up), are in place to ensure financial discipline. This updated credit facility offers FICO robust borrowing capacity and strategic financial tools.

Key Highlights

  • 1FICO entered into a new $400 million unsecured, five-year revolving credit facility on December 30, 2014.
  • 2The credit facility has the potential to be increased to $500 million under specific terms and conditions.
  • 3Proceeds can be used for general corporate purposes, working capital, debt refinancing, permitted acquisitions, and stock repurchases.
  • 4Borrowing costs are tied to either a base rate or adjusted Eurodollar rate, with margins varying based on the Company's total leverage ratio.
  • 5The agreement includes financial covenants requiring a fixed charge coverage ratio of at least 2.50:1.00 and a total leverage ratio not exceeding 3.00:1.00 (with a possible increase to 3.50:1.00 post-acquisition).
  • 6Customary default provisions are included, with default interest rates and potential acceleration of obligations upon an event of default, including a change of control or default on other debt exceeding $25 million.

Frequently Asked Questions

The primary purpose of the Amended and Restated Credit Agreement is to establish a $400 million revolving credit facility that provides Fair Isaac Corporation (FICO) with financial flexibility. This facility can be used for various strategic initiatives including refinancing existing debt, funding permitted acquisitions, repurchasing company stock, and meeting general working capital and corporate needs.

The credit facility is subject to financial covenants, notably requiring FICO to maintain a fixed charge coverage ratio of not less than 2.50 to 1.00 and a total leverage ratio not exceeding 3.00 to 1.00. The total leverage ratio may be permitted to step up to 3.50 to 1.00 following certain permitted acquisitions if specific conditions are met. Interest rates will be based on either a base rate or an adjusted Eurodollar rate, with applicable margins determined by FICO's total leverage ratio.

Events of default, which could lead to increased interest rates (by 2%) and immediate repayment demands, include a change of control of FICO or the company defaulting on other debt obligations exceeding $25 million. The agreement also contains other customary default provisions typical for unsecured credit facilities.

Yes, the credit facility has the potential to be increased from $400 million to $500 million. This increase is subject to certain terms and conditions as outlined in the Credit Agreement.