8-KMaterial AgreementsFinancial EventsExhibits & Filings

FAIR ISAAC CORP 8-K Report, Material Agreement (May 8, 2018)

Filed May 8, 2018For Securities:FICO

Summary

Fair Isaac Corporation (FICO) announced on May 8, 2018, the successful closing of a private offering for $400 million of 5.25% Senior Notes due 2026. The primary purpose of this issuance is to refinance existing debt, specifically to repay amounts drawn on its unsecured revolving credit facility, which was used to retire its 7.18% Series D Senior Notes due 2018. This strategic move aims to lower the company's overall cost of debt and extend its maturity profile. In conjunction with the note offering, FICO also entered into a Third Amendment to its Amended and Restated Credit Agreement. This amendment extends the maturity of its unsecured revolving credit facility to May 8, 2023, and modifies key financial covenants. Notably, the maximum consolidated leverage ratio was adjusted, and the aggregate revolving commitments were reduced from $600 million to $400 million, though with an option to increase by $100 million. These actions demonstrate FICO's proactive management of its capital structure and debt obligations.

Key Highlights

  • 1Closed a private offering of $400 million in 5.25% Senior Notes due 2026.
  • 2Proceeds from the notes will be used to repay outstanding debt under the company's revolving credit facility.
  • 3The refinancing includes repaying the maturing 7.18% Series D Senior Notes due 2018.
  • 4Entered into a Third Amendment to its Credit Agreement, extending the credit facility maturity to May 8, 2023.
  • 5Reduced aggregate revolving commitments under the credit facility from $600 million to $400 million, with a potential $100 million increase.
  • 6Modified financial covenants, including changes to the maximum consolidated leverage ratio and other debt-related ratios.
  • 7The new Senior Notes are unsecured and will not be guaranteed by subsidiaries at issuance, but future significant domestic subsidiaries are required to guarantee them.

Frequently Asked Questions

The primary purpose of the $400 million Senior Notes offering is to refinance existing indebtedness. Specifically, the proceeds are intended to repay amounts outstanding under Fair Isaac Corporation's unsecured revolving credit facility, which was used to retire its 7.18% Series D Senior Notes that matured in 2018. This aims to manage the company's debt structure and potentially lower its interest expense.

The Third Amendment to the Credit Agreement extends the maturity of the unsecured revolving credit facility to May 8, 2023. However, it also reduces the aggregate revolving commitments from $600 million to $400 million. The company does have the option to increase these commitments by an additional $100 million, subject to certain conditions.

The financial covenants have been modified to include a maximum consolidated leverage ratio not exceeding 3.25 to 1.00 (with a potential step-up to 3.75 to 1.00 following certain acquisitions). Additionally, the company must maintain specific fixed charge coverage ratios (currently 2.50 to 1.00) or an interest coverage ratio of at least 3.00 to 1.00 if those fixed charge coverage ratios are not applicable under other debt agreements.

No, the 5.25% Senior Notes due 2026 are senior unsecured obligations of Fair Isaac Corporation. While no subsidiaries are guarantors at the time of issuance, the Indenture stipulates that future significant domestic subsidiaries will be required to provide a joint and several senior unsecured guarantee.