8-KMaterial AgreementsFinancial EventsExhibits & Filings

FAIR ISAAC CORP 8-K Report, Material Agreement (Aug 19, 2021)

Filed August 19, 2021For Securities:FICO

Summary

Fair Isaac Corporation (FICO) announced on August 19, 2021, the entry into a Second Amended and Restated Credit Agreement, establishing a new $600 million, five-year unsecured revolving credit facility. This facility provides FICO with significant financial flexibility, with the option to increase the facility by an amount that would not violate certain leverage ratio covenants. The proceeds are earmarked for a variety of uses, including refinancing existing debt, share repurchases, general corporate purposes, and working capital needs. This new credit facility replaces prior arrangements and has an initial outstanding balance of $475 million. The terms reflect current market conditions, with interest rates tied to either a base rate or adjusted Eurodollar rate, plus applicable margins that fluctuate based on FICO's total leverage ratio. The facility also includes customary financial covenants, such as maintaining an interest coverage ratio of at least 3.00 to 1.00 and a total leverage ratio not exceeding 3.50 to 1.00 (with potential adjustments for acquisitions), along with standard default provisions.

Key Highlights

  • 1FICO entered into a new $600 million unsecured revolving credit facility.
  • 2The credit facility has a five-year term.
  • 3The facility can be expanded beyond $600 million under certain conditions related to EBITDA and leverage ratios.
  • 4Proceeds can be used for debt refinancing, share repurchases, working capital, and general corporate purposes.
  • 5The company has $475 million in borrowings under the new agreement, which refinanced existing debt.
  • 6Interest rates are variable, based on base rate or Eurodollar rate plus a margin tied to the company's leverage ratio.
  • 7Key financial covenants include maintaining an interest coverage ratio >= 3.00x and a total leverage ratio <= 3.50x (subject to adjustments).

Frequently Asked Questions

The primary purpose of the new credit facility is to provide Fair Isaac Corporation (FICO) with financial flexibility. It can be used to refinance existing debt, repurchase the Company's stock, fund fees and expenses related to the facility itself, and support working capital needs and general corporate purposes for FICO and its subsidiaries.

As of the filing date, FICO has $475 million in aggregate principal amount of borrowings outstanding under the new credit agreement, which were used to refinance certain indebtedness under its previous credit facility.

FICO is required to maintain a minimum interest coverage ratio of not less than 3.00 to 1.00. Additionally, the Company must maintain a total leverage ratio of not more than 3.50 to 1.00. This total leverage ratio covenant has a provision to step up to 4.00 to 1.00 following certain permitted acquisitions, provided specific conditions are met. The credit agreement also contains other typical covenants for unsecured credit facilities.

Yes, the credit facility can be increased to an aggregate amount not to exceed the greater of (a) 100% of the Company's EBITDA for the most recently ended four fiscal quarters, or (b) an amount that would not cause the total leverage ratio to exceed a specified level (0.50 to 1.00 below the then-current maximum total leverage ratio covenant) after giving pro forma effect to the increase.