8-KMaterial AgreementsFinancial EventsExhibits & Filings

FAIR ISAAC CORP 8-K Report, Material Agreement (Oct 21, 2021)

Filed October 21, 2021For Securities:FICO

Summary

Fair Isaac Corporation (FICO) announced an amendment to its existing credit agreement on October 21, 2021, which was effective October 20, 2021. This amendment introduces a new $300 million unsecured term loan, maturing on August 19, 2026, with the option for FICO to seek additional incremental term loans in the future. This new facility provides FICO with enhanced financial flexibility and capital for its strategic initiatives. The existing $600 million revolving credit facility remains in place, and the overall credit facility has the potential to be increased significantly. The increase is contingent on FICO's EBITDA performance and maintaining a leverage ratio not exceeding 0.50 to 1.00 below the existing maximum covenant. The terms of the new term loan include quarterly principal repayments and no prepayment penalties, offering FICO flexibility in managing its debt obligations.

Key Highlights

  • 1FICO entered into a First Amendment to its Credit Agreement, effective October 20, 2021.
  • 2A new $300 million unsecured term loan (Initial Term Loan) was added, maturing on August 19, 2026.
  • 3The Company has the option to request additional incremental term loans.
  • 4The existing $600 million revolving loan facility remains in place.
  • 5The total credit facility can be increased based on EBITDA and leverage ratio covenants.
  • 6The Initial Term Loan requires quarterly principal repayments of $3.75 million starting March 31, 2022.
  • 7Prepayment of the Initial Term Loan and Incremental Term Loans is permitted without premium or penalty.

Frequently Asked Questions

This 8-K filing primarily reports on Fair Isaac Corporation's (FICO) entry into a material definitive agreement, specifically an amendment to its credit agreement that introduces a new $300 million term loan.

The new $300 million term loan adds to FICO's debt, with scheduled quarterly principal repayments starting in March 2022. However, it also provides access to additional capital and offers flexibility with no prepayment penalties, which can be beneficial for managing cash flow and debt strategically.

The credit facility can be increased if FICO's EBITDA for the most recently ended four fiscal quarters meets certain thresholds and if the pro forma total leverage ratio does not exceed a specified level below the existing maximum covenant. This links potential debt capacity to the company's financial performance.

Interest rates are based on either a base rate (related to Wells Fargo's rate or federal funds rate plus a spread) or an adjusted Eurodollar rate (or successor benchmark rate), plus an applicable margin. The applicable margin varies based on FICO's total leverage ratio, ranging from 0-75 basis points for base rate borrowings and 100-175 basis points for Eurodollar borrowings.