Summary
Fair Isaac Corporation (FICO) announced an amendment to its existing credit agreement, specifically entering into a Third Amendment on June 13, 2024. This amendment introduces a new unsecured incremental term loan of $450 million, referred to as the Incremental Term A-1 Loan, which will mature on August 19, 2026. This new loan facility is in addition to the Company's existing $600 million revolving loan facility and $300 million initial term loan. The terms of this new loan are largely consistent with the existing credit agreement, including no scheduled principal repayments before maturity and the option for prepayment without penalty. The interest rate structure is variable and depends on the Company's total leverage ratio.
Key Highlights
- 1FICO has secured a new $450 million unsecured incremental term loan, maturing August 19, 2026.
- 2This new loan is an addition to the existing $600 million revolving facility and $300 million initial term loan.
- 3The Incremental Term A-1 Loan has no scheduled principal repayments before maturity.
- 4The Company can prepay the Incremental Term A-1 Loan in whole or in part without premium or penalty.
- 5Interest rates on the new loan are variable, based on a choice of base rate or adjusted term SOFR rate, plus an applicable margin.
- 6The applicable margin is determined by FICO's total leverage ratio, ranging from 0 to 175 basis points depending on the borrowing type (base rate or SOFR).
- 7The amendment was executed on June 13, 2024, with Wells Fargo Bank, National Association serving as the administrative agent.
Frequently Asked Questions
This 8-K filing announces that Fair Isaac Corporation (FICO) has entered into a Third Amendment to its credit agreement, which includes the addition of a new $450 million unsecured incremental term loan.
The new loan is an unsecured incremental term loan that matures in August 2026. It adds to FICO's existing debt facilities, which include a revolving loan facility and an initial term loan. The company has flexibility with this new loan as there are no scheduled principal repayments before maturity and it can be prepaid without penalty.
The interest rate is variable and can be based on either a base rate or an adjusted term SOFR rate. Both options are subject to an applicable margin that is determined by FICO's total leverage ratio. The margin for SOFR borrowings ranges from 100 to 175 basis points, and for base rate borrowings, it ranges from 0 to 75 basis points.
The filing does not suggest financial distress. The addition of a term loan, especially one with flexible repayment terms and a variable interest rate tied to leverage, is a common financing activity for companies to manage their capital structure, fund operations, or pursue strategic initiatives.